Western Potash, Karnalyte shares dive on Potash Corp. industry comments

Potash Corp. (TSE:POT)(NYSE:POT) CEO Bill Doyle said he did not expect any new mines to start production in the next five years, hurting the shares of two junior potash companies.

Shares of Western Potash Corp. (TSE:WPX) plunged nearly 23 per cent and Karnalyte Resources (TSE:KRN) lost 26 per cent of value in Toronto.

As at 12.40pm EDT, Western Potash shares were down 22 cents at 19 cents while Karnalyte stock lost $1.03 to reach $5.75.

In a webcast on Wednesday, Potash Corp.'s Doyle said he did not expect any new potash mines to start by 2017.

Both Western Potash and Karnalyte are seeking investors to build potash mines in the resource-rich Canadian province of Saskatchewan, which is also home to Potash Corp., the world's biggest producer of the crop nutrients.

One analyst said that Doyle's comments may have hurt the junior companies' shares, but they are similar to statements he has made previously, suggesting there may be other factors in the share price drop.

Along with junior miners who are in the planning stages, BHP Billiton (LON:BHP) and K+S AG have started work on potash mines in Saskatchewan.