Saskatoon-based PotashCorp, already the world’s biggest potash producer by capacity, plans to boost that capacity by two million tonnes per year with a US$1.8 billion mine and mill expansion at Rocanville in southeastern Saskatchewan.
The company said in a release Wednesday that this project will raise PotashCorp’s total annual potash capacity to 15.7 million tonnes by the end of 2012, three years earlier than the company had previously planned, and to 17.2 million tonnes by 2015.
The company noted that leveraging off its existing Rocanville facilities and infrastructure will be far faster and over 25 per cent less expensive than developing the same size of greenfield capacity — that is, starting at a new site from scratch. The current Rocanville site, it noted, is already believed to be one of the lowest-cost production facilities in the industry.
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“Our best estimate for a two-million-tonne greenfield mine in Saskatchewan today is US$2.5 billion, and that is only within the plant gate with no infrastructure requirements,” said PotashCorp CEO Bill Doyle in the release.
Pending approval of permits, the new project will involve expanding an area of the deposit next to its existing potash Crown lease, and installing a new service shaft there to carry people and materials. The company will then convert the Rocanville service shaft already in place to become an ore-hoisting production shaft.
A new mill to process an extra two million tonnes of finished product each year will be built next to the existing Rocanville mill, PotashCorp said.
“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,” the company said, citing worldwide demand driven by growing economic strength and a shift to more protein-rich diets in Asia and Latin America.
