Canada: K+S decided to move forward with the Legacy Project

End of last November, German K+S AG, Europe’s largest producer of potash, decided to go forward with the Legacy Project, which it purchased for C$434 million by taking over the Canadian company Potash One. It is located  some 50 km from the Moose Jaw city, in southern Saskatchewan, and initial infrastructure construction works in the areas of water supply, electricity and road developments as well as drilling activities have already begun at the site. The start of production and first volumes are expected in 2015 and by 2017 they expect to reach an annual capacity of 2 million tonnes of MOP, with a further increase to 2.86 million tonnes MOP in 2023. K+S website states that a further expansion of production capacity to 4 million tonnes of potassium chloride p.a. is possible in the long-term. At about 18%, the Legacy K2O content is significantly higher than that of the German sites, and its useful life has been calculated in more than 55 years, including the ramp-up curve.  The German potash deposits are the fourth largest in the world and their recoverable reserves are estimated in some 0.8 billion tonnes of K2O. The K+S Group revenues were in 2010 of EUR 4.6 billion, compared to EUR 3.2 billion in the previous year. Of it the Potash and Magnesium Products sector contributed in 2010 with EUR 1.9 billion, compared to EUR 1.4 billion in 2009. The financial results of the K+S Group for the whole of 2011 are expected to be significantly higher than in 2010 due to better than predicted demand and price trends witnessed in January-September. K+S is the fifth largest potash worldwide producer, buy they are a rather high-cost manufacturer. Half of their revenues are originated in Europe, and the other half overseas.

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