Feasibility Study On Canada Potash Project Apprajsal Of YZC Company

Since1990s, economic globalization has been gaining momentum. It is changing the international division of labor, and countries attach more importance to global resource allocation. Chinese companies also have gradually realized the importance of outward investment and regard it as one of importance measures to improve their standing in the global economic environment.Our country’s serious deficiency in supply of mineral resources significantly affects its economic development. Even worse, this poses a danger to national security. China is short of potash resources. Its potash reserves account for only2.4%of that of the world. Its dependency on imported potash fertilizers is up to60.1%approximately. Its gap in potash fertilizer capacity is approximately5.48Mt/a. China has seen a rapid growth in its potash fertilizer capacity, but its current capacity to produce potash fertilizers are not yet sufficient to meet the demand for the development of agriculture and industry, and thus, it needs to import a considerable amount of potash fertilizers every year. Canada ranks first in the world in potash reserves, production, and exports. Saskatchewan in central Canada is named as "the Potash Capital of the World". The province’s potash reserves account for52%and33%of the world respectively. YZC launching its potash project in Canada will have great significance for its international development, and in addition, will provide an effective guarantee for our country’s sustainable agricultural development and food security.The paper presents a feasibility study of the potash project to be launched by YZC according to relevant theories. Firstly, multiple analysis approaches including Michael Porter’s five-force model and SWOT are used to determine if feasible and necessary this investment of YZC is. This is favorable for YZC to maintain risk control and reduce its future operation risk. Secondly, market forecasting, technical analysis, investment analysis, financial evaluation, and risk analysis are carried out to draw the conclusion that the potash project of YZC in Canada is feasible. This is a procedure of applying relevant feasibility study theories into practice to provide the useful basis for the decision maker. Various stages of a mining project involve different evaluation highlights. This is significant when a mining investment decision is made.YZC sticks to the following principles abroad:"low-profile and cautious operation, step-by-step development, localized operation, and win-win cooperation". In addition, it attaches importance to processes including project selection, due diligence investigation, project valuation, assets planning, project approval, and production or operation. With the acceleration of our country’s industrialization and urbanization, its economic development has an increasing demand for mineral resources, and the gap between its demand and supply of mineral resources is increasingly prominent. Against the big background that Chinese companies are implementing the strategy of international operation, it is theoretically and practically very significant to carry out in-depth study of relevant issues on YZC’s investment in its potash project in Canada. This will provide great guidance significance and reference value for our country’s mining enterprises how to make investment decisions and what strategies and actions to take when making investments abroad.