June 22, 2012
Fertiliser producer K+S launches new potash mine in Canada
The first new potash mine in Saskatchewan, Canada worth US$3.2 billion has been launched by one of the world''s leading fertiliser producers K+S AG.
The official ground-breaking ceremony attended by K+S chairman Norbert Steiner and the minister of resources of Saskatchewan Tim McMillan, gave the green signal for the extensive construction work on the new potash mine in Bethune in the south of Saskatchewan.
Saskatchewan has the world''s largest potash reserves, a mineral which is mainly used for making fertilisers, demand for which is soaring in countries like India and China as farmers strive to raise their crop yields to feed the growing population.
Legacy is a Greenfield project in Bethune, about 60 kilometres northwest of the provincial capital Regina. Solution mining technology will be applied to extract the potash minerals, which involves dissolving water- soluble minerals with water injected through bore wells into underground deposits and further recovery of the minerals on the surface.
Commenting on the significance of the new project, Steiner said, ''''We are convinced that Legacy is a decisive strategic step forward for the whole K+S Group and, in combination with our German potash mines, will significantly strengthen the international competitiveness of K+S''''.
The preparatory works for establishing the project has been underway since 2011 and are almost completed.
At the ground-breaking ceremony, McMillan said, ''''For the first time in over 40 years, a brand new potash mine will be built in our province. The jobs and economic development from this project will help us to continue to grow our economy, and keep the Saskatchewan advantage.''''
First production of potash is expected towards the end of 2015 and a target of two million tonnes will be achieved in 2017 with the prospects of further expansion in the following years.
Steiner said the resource will help feed the world for generations to come.
"We believe that the Legacy project is an investment in the future of our company, an investment in the people of Saskatchewan and an investment in a sustainable future."
Kassel, Germany-headquartered K+S group produces potash and magnesium products, nitrogen fertilisers and salt. It is the world''s fifth-largest potash producer and the world''s largest producer of sat.
The company has operations in several European countries as well as in North and South America and sales offices throughout the world providing goods and services for the agriculture and industry. The group''s 2011 revenue was over 5.1 billion.
K+S secured the rights for the Legacy project in early 2011, through the acquisition of Vancouver-based mine developer Potash One Inc for US$427 million.
Other mining giants including PotashCorp of Saskatchewan and BHP Billiton as well as some Chinese companies are also increasing their investment in potash mining in Saskatchewan in order to meet the increasing demand for fertilisers worldwide.
Canada is the world''s largest potash producer, accounting for around 30% of global production and 60% of the mineral reserves.
India with its growing agricultural needs is the world''s largest potash importer followed by China and Brazil. The country meets its requirement by executing annual potash supply contracts with global cartels.
After a months-long standoff over the price, last August Indian fertiliser companies agreed to buy potash at an average price of around US$500 a tonne.