PotashCorp Rolls On with Ambitious Potash Mine Expansion Program in Canada

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Researched by Industrial Info Resources (Sugar Land, Texas). The expansions just keep coming for leading potash miner and fertilizer producer Potash Corporation of Saskatchewan Incorporated (PotashCorp) (NYSE:POT) (Saskatoon, Saskatchewan). Claiming 22% of the world potash capacity and true to a corporate strategy that involves internal growth through capacity investment, PotashCorp has been expanding its mines in Canada (Saskatchewan and New Brunswick) for several years, and there seems to be no end to the project development in sight. PotashCorp has recently completed, is underway with, or is planning more than $2 billion in Potash mine capacity expansion projects at existing mines in Canada. PotashCorp operates potash mines in Allan, Cory, Rocanville, Lanigan, Patience Lake, all in Saskatchewan and Penobsquis, New Brunswick, in addition to fertilizer plants around the globe.

In 2005, PotashCorp completed a $70 million expansion at its Allan mine and an $80 million expansion at its Rocanville mine. The company is wrapping up a $200 million phase 1 mine expansion and a $41 million compaction equipment project in Lanigan, Saskatchewan. PotashCorp is awaiting environmental approvals at the company’s Patience Lake solution mine to begin a three-year project to add 22 extraction wells and high-density polyethylene pipelines. Construction is scheduled to kick off this fall (2007).

The next project to be announced could be greater than $1 billion to expand the underground potash mining capacity at PotashCorp’s only New Brunswick mine. This project could gain corporate approval by July 2007. The New Brunswick mine is PotashCorp’s smallest mine, producing around 775,000 tons per year. The expansion, if approved, would take four years to construct and add somewhere between 1.25 million and 2 million tons per year capacity. It would require a new headframe, and underground mining shafts, as well as a mill and concentrator plant.

AMEC Americas Limited (Saskatoon, Saskatchewan) has provided engineering and construction services for all of PotashCorp’s recent projects and the New Brunswick project will be no different. However, due to high project activity worldwide and limited engineering and construction resources, the company may look at partnering or splitting project responsibilities in order to implement a project in New Brunswick.

The New Brunswick project comes on the heels of a recently announced $775 million expansion of the company’s potash mining operations in Cory, Saskatchewan, which will boost capacity up to 2 million tons per year. The Cory mine produced 800,000 tons in 2006.

Don’t expect PotashCorp to stop there, the company is mulling additional expansions in Saskatchewan.

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