The Port of Vancouver’s plans to bring the world’s largest mining company to town won’t be settled for at least another year. However, the port stands to immediately gain revenue from the deal. Its leaders expect to join representatives of BHP Billiton next month to discuss building permits for a project that could create at least 60 full-time jobs.
Beginning in September, BHP will pay the port roughly $750,000 per year to hold onto the land it wants for an export facility at the port’s Terminal 5 to ship fertilizers for crops. That means the port will bring in roughly $250,000 by the end of this year from a project that hasn’t even been built yet. In total, the short-term lease will add an estimated $1 million to port coffers by 2012, when the port expects to nail down the final terms of a long-term lease with BHP.
These figures are small potatoes for the Australian miner, which is in the midst of attempting a $38.6 billion takeover of Potash Corp. of Saskatchewan Inc. But the rent will provide a boost to the port as it continues development of its Terminal 5.
“I’m not complaining,” Larry Paulson, executive director for the port, said of the influx of cash. The port’s total budget this year is roughly $59 million.
On Sept. 2, port officials and representatives of BHP expect to meet with Vancouver city planners to discuss the regulatory requirements for securing building permits. The public meeting is scheduled for 1:30 p.m. at 4400 N.E. 77th Ave., conference room 3A.
Negotiations between the port and BHP Billiton represent yet another attempt by the port to pump up economic development in Clark County, which had a jobless rate of 13.3 percent in July — the highest unemployment level in Washington. On Aug. 10, for example, port commissioners voted to sell 20 acres to Farwest Steel Corp. for $5 million in hopes of enabling the company to build a new facility and eventually employ 228 workers.
BHP Billiton plans to build an export center for potash, a natural mineral fertilizer that improves crop yields. The facility, to be built on roughly 60 acres of the port’s 218-acre Terminal 5, would include handling, storage, dock and rail operations. BHP, headquartered in Melbourne, Australia, would ship potash by rail to the port, where it would then be loaded onto ships bound primarily for Asia. The company would haul the potash from a mine it’s developing in Canada’s Saskatchewan Basin, which is unrelated to its bid to take over Potash Corp.
Plans emerge
The cost of the project is unclear. Documents filed with the city as part of the pre-application process say it could create 60 jobs, although Paulson said the number likely will be higher because of the eventual addition of other jobs associated with operation of the export facility. If all goes as planned, construction of the export facility would occur over two-and-a-half years, beginning in September 2012 and finishing in April 2015, after which it would begin operation.
The storage structure for the potash would be designed to allow for future expansions, so that it may eventually make room for 8 million metric tons per year. At that point the facility would be roughly 487,000 square feet, according to pre-application documents. Port officials said the scope of the project with BHP is bigger than anything the port has done previously.
Paulson said the short-term lease, requiring BHP to pay money to keep the land off the market, will remain in place until either a long-term lease is signed or BHP decides it doesn’t want to do the project. The port also has the option to back out of the deal. Port officials have said the company is sending nothing but positive signals. Paulson said the long-term lease will pay the port more than the annual $750,000 it will receive from BHP to hold onto the land. He declined to say how much more because negotiations are still under way.
Paulson said the short-term revenue could be plowed directly into transportation, utility and other work to prepare for BHP’s planned export center.
Port officials said BHP’s plans will not be affected by the company’s bid to takeover Potash Corp.
