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MEI Online: Plant Operation News: North America: December 3rd 2007

 
 

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:: PotashCorp Announces Major Mine and Mill Expansion at Rocanville

Saskatchewan Inc. (PotashCorp) has announced plans for a 2-million-tonne mine and mill expansion at Rocanville, SK, that will raise the company's total annual potash capacity to 15.7 million tonnes by the end of 2012, which is three years earlier than previously announced. By leveraging off the existing facilities and infrastructure at Rocanville, which we believe is one of the lowest-cost production facilities in the world potash industry, we expect to complete the project in less than five years at an estimated cost of US $1.8 billion. This would be significantly faster and over 25 percent less expensive than comparative greenfield capacity, and will help maintain Rocanville's already low-cost position.

"For nearly 20 years we have optimized the value of our potash assets and consistently served the needs of our customers by following our long-held strategy of matching supply to market demand," said PotashCorp President and CEO Bill Doyle. "With a global environment of growing demand and tight supply, potash consumers around the world need us to bring more product to the table, and this is our next step in meeting that need. The cost of a greenfield operation has continually escalated and at a very rapid pace. Our best estimate for a 2-million-tonne greenfield mine in Saskatchewan today is US $2.5 billion, and that is only within the plant gate with no infrastructure requirements."

Rocanville, in southeastern Saskatchewan, is an extremely valuable asset due to the quality of the potash deposit and its proximity to the US market. The unique geology of the deposit allows for the most technically advanced potash mining methods in the world to be applied, lowering our production costs. To support this project, we will significantly expand an area of the deposit adjacent to the existing Rocanville potash Crown lease. One new service shaft - used to transport people and materials - will be sunk in this new area of the deposit, while the existing service shaft will be converted to a production shaft. When the project is completed, Rocanville will have two shafts with ore-hoisting capability, substantially raising the volume of potash that can be brought to the surface. A new underground conveyance system will be constructed to transport ore from the new mining area to the production shafts. This will reduce both the cost of the expansion and the ramp-up time, as only one new shaft will be needed and existing underground workings will partially support the increased production. Mining machines, underground services and infrastructure for power will be added as required.

A new mill that will process 2 million tonnes of additional finished product annually will be built adjacent to the existing mill. New offices will be constructed on the site of the new service shaft, while existing load-out, storage and onsite rail capability can be leveraged to handle the increased tonnes with minimal investment. The project will begin immediately after final permitting approvals are received.

The expansion will enable us to better respond to the continuing growth in global potash demand, which is primarily driven by rising population and increasing economic strength in Asia and Latin America that is enabling people to shift to protein-rich diets. To keep pace with this growing demand, earlier in the year we announced debottlenecking and expansion projects at Patience Lake (returning 360,000 tonnes of idled capacity by 2009), Cory (a 1.2-million-tonne debottleneck and expansion by 2010) and New Brunswick (a new 2.0-million-tonne mine with ramp up starting at the end of 2011). However, with the rest of the potash industry believed to be operating at or near capacity, we expect the additional capacity at Rocanville to be necessary to meet further demand growth. These projects, combined with expected other future debottlenecking opportunities at our existing Saskatchewan facilities, will raise our projected annual capacity to 15.7 million tonnes by the end of 2012 and 17.2 million tonnes by 2015.

"We believe the factors driving long-term growth in potash demand are unlikely to reverse," said Doyle. "As the company with the expertise and ability to bring on significant capacity more quickly and at lower cost, PotashCorp is well positioned to meet that demand. As we have in the past, we will manage this capacity according to market demand, always striving to meet the needs of our customers around the world while delivering value to the investors who have supported our continued growth."

Please see our website, www.potashcorp.com, for additional information about the Rocanville expansion, including audio of a related question-and-answer session with President and CEO Bill Doyle.

 

 

   

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