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POTASH MINING – PCS to spend half-billion at Lanigan and Allan

SASKATOON - Following the implementation of recent provincial tax changes aimed at increasing potash production, PO...


SASKATOON – Following the implementation of recent provincial tax changes aimed at increasing potash production, POTASH CORP. OF SASKATCHEWAN (PCS) is investing nearly half-a-billion dollars into its Lanigan and Allan mines. The goal is to bring 1.9 million tonnes of idle capacity back online and to boost production of granular products.

PCS has earmarked US$275 million for the two mines to raise capacity. The Allan mill will be refurbished by April 2006 resulting in an additional 400,000 tonnes/year of output. Also, the Lanigan mill is to be restored, brining another 1.5 million tonnes of potash to market annually beginning in the fourth quarter of 2007.

In addition to the above projects, the company plans to boost compaction capacity by 1.25 million tonnes/year to meet the demand for granular products. At Allan, a US$64-million project will add 500,000 tonnes, and at Lanigan, a $US41-million project will add 750,000 tonnes.

Investment at Lanigan and Allan will total Cdn$456 million, according to company figures.

To bring PCS output to its 12.5-million tonnes/year nameplate capacity, other small projects would need to be implemented at the Cory and Patience Lake mines. Together they would cost US$120-140 million in addition to the funds already committed.

PCS bills itself as the world’s largest potash company. In 2004 it produced a record-breaking 7.91 million tonnes of KCl from its seven Canadian operations. The target for 2005 is 9.6 million tonnes. Its mines and plants operated last year at only 65% of capacity so there is ample opportunity to increase output quickly. About 86% of the world’s idled potash capacity belongs to PCS.

The PCS 2004 annual report is available in full at www.PotashCorp.com.


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