So we are investing a significant part of our sustaining capital to restore some of the historical proven turnaround cycles that have been disrupted through the pandemic and some of these hurricanes. And we are aggressively in addition to that, replacing some of our aging assets throughout North America. And when we couple all of that from an asset base with the better technology that our global digital acceleration investments that we’ve talked about are coming to bear as well as some other internal organization realignment that we’ve done, we should see even better proactive managing of maintenance of our equipment and onboarding and training of some of our key personnel, all of that leading to improved reliability and productivity. So to close and get to your point, we expect to see production volumes significantly improve next year from the last two years and return to historical run rate levels at that $2 million a quarter in the back half of 2024.
Operator: Thank you. And our next question today comes from Adam Samuelson with Goldman Sachs. Please go ahead.
Adam Samuelson : Yes, thank you. And good morning, everyone. I want to come back to potash and Mosaic’s own kind of production outlook. And I just want to be clear on this year, the company has — especially in the third quarter, you’ve taken out — your sales have exceeded your own production by about 575,000 tonnes. Now last year, you sold more than — you produced more than you sold, but you’ve worked down a pretty healthy amount of your own inventories. You’re calling for a sequential uplift in sales volumes in the fourth quarter, which would be at a level that really the company has really never hit on a quarterly basis, but I know investors has been expanded. But I guess as we — going back to some earlier lines of questioning, why couldn’t — rather than Jack, you alluded to logistics constraints being a real challenge for Mosaic to operate at higher volumes.
Why wouldn’t the natural investment for Canpotex be to increase its logistics capability and alternative port infrastructure, maybe away from the West Coast that could kind of provide some risk mitigation to winter weather that would allow the company and your Canpotex partner to produce more consistently and reliably at higher rates because close might be your higher cost mine, but it’s not high cost really in the context of the global market.
Joc O’Rourke : Thanks, Adam. You make great points there. Let me start by saying, Canpotex has greatly improved their logistics capabilities through rail infrastructure improvements in our facility in Vancouver, our facility in Portland has been expanded. We have maximized or optimized our use — their use, I’d say there because it’s — it is an independent entity, their use of the, I would say, John’s port and the use of Thunder Bay. So we are sending as Canpotex significant volumes, both to the East Coast and the West Coast, and that allows us to deal with things like the port strikes and whatnot. My only point there is there is a limit to what you can move and how fast you can grow. We’ve probably grown Canpotex over the years from, let’s say, 10 million, 10.5 million tonnes to 13 million to 14 million tonnes.
So if you look at it from that perspective, Canpotex has actually done a pretty darn good job. And I can tell you that under the leadership of Ken Seitz and continued under the leadership of Gord McKenzie, Canpotex has taken some real strides to solidify their markets, to improve their logistic capability. My point there is not to say that we haven’t been doing a lot on that end. It’s to say that we can’t ignore those as real limitations to how fast you can possibly grow and how fast you can respond to step changes or disruptions in the international market. And then finally, of course, you’re relying on Canadian National and Canadian Pacific Railways, who from time to time have issues as well.
Operator: Thank you. And our next question today comes from Aron Ceccarelli with Berenberg. Please go ahead.
Aron Ceccarelli : Hi, good morning. Thanks for taking my question. I would like to go back to potash. Despite your strong sales volume for outlook for Q4, your pricing outlook is relatively muted, as you said. At the same time, Nutrients flagged that Russia is possibly coming back a little bit faster than originally anticipated. There’s a contract with China and Canpotex’s expiring if I’m correct at the end of the year. My question is what could really prevent us to see a contract with China next year with Canpotex between Canpotex and China to be below $307 per tonne? Thank you.
Joc O’Rourke : Yeah. Okay, Aron, thank you. Look, as we look forward on this, if we are back at the 70 million tonnes, which we expect the demand to be, there will be room for the Russians. The Russians will continue to export across the years by rail, Belarus will continue to export by rail into China. The seaborne product will have to continue because China is actually buying record amounts of potash as they need for their growth of their markets. So I’ve always said and even our Chinese customers fully agree that the Chinese customers need Canpotex and Canpotex needs are Chinese customers. So it is one of those situations where, yes, there’s always tension as you try to build — get to the final contract, and it matters what the level of inventory sitting on the ground is in China, what their demand is at the time.
And there’s always a holdout to the last possible moment. But in the end, you come up with a contract, which is as close as we can to the market. And that’s a — they’re very informed buyers and our Canpotex marketers are very informed marketers. So you normally come up with a pretty good balance. In terms of whether we can repeat the $307 contract really depends on how things look as you move into 2024. The relevance of the seaborne trade is lower today than it was before because of these rail imports and because of the Qinghai Lake production, which is taking up a good chunk of their production. But the point I make there is the issue will not be Russian’s new production coming on or anything like that. It will be how does the global market look?
What is the price comparators for Brazil, for Indonesia, Malaysia, China possibly? And again, what’s their inventory position and when are they ready to come to the table. So it’s pretty early days, but that market will always have a fairly complicated dynamic.
Operator: Thank you. And our next question today comes from Jeff Zekauskas with JPMorgan. Please go ahead.
Jeff Zekauskas : Thanks very much. I think Belarus Cali [ph] over the past 2 months has been shipping at a little bit more than 900,000 tonnes per month, which means that they’re shipping at an annualized rate now of about 11 million tonnes. And so I was wondering why you thought next year, they might be 3 million tonnes below their normal output?
Joc O’Rourke : Yeah. Thanks, Jeff. I think the simple thing there is we don’t know where exactly that is coming from. Is that product that’s been built up at a port waiting to go out? I think you can’t look at three months, particularly three months of summer and compare to whole year. We know that those ports have issues in the winter with respect to freezing and unavailability, et cetera, et cetera. So as we look at — whether we look at Belarus, Belaruskali or whether we look at the Russian producers, their seasonal shipments are never as high as their summer shipments. So our expectation is that’s what they’ll do. And again, not unlike Canada, it gets pretty darn cold in the winter around that area. And shipping by rail, that kind of distance, it can be pretty challenging. You’re going to get all kinds of issues. And so our expectation is, yes, they may be able to do it in the summer, but we would discount that or at least risk adjust that for the winter months.
