Agrium to spend $1.5 billion to expand potash capacity

Agrium to spend $1.5 billion to expand potash capacity

(Reuters) - Agrium's house has sealed off on a long-planned $1.5 billion plan to enhance a potash production capacity by about 50 percent, aiming during capitalizing direct for a stand nutrient.

Calgary, Alberta-based Agrium pronounced on Wednesday a enlargement of a operations during Vanscoy in a potash-rich western Canadian province of Saskatchewan will cost reduction and take reduction time than building a potash cave from scratch.

"Our brownfield potash enlargement will eventually be most quicker to move on, and significantly reduction costly to develop, than any greenfield project that is underneath consideration," pronounced Chief Executive Mike Wilson in a statement.

Agrium, a manure writer as good as a largest plantation products tradesman in North America, also pronounced it is quadrupling a semi-annual pision to 22.5 cents per share from 5.5 cents a share.

"The boost in a pision is a outcome of a continued enlargement in fast gain from a sell business and a strength in a indiscriminate gain form and outlook," pronounced Wilson.

The association pronounced a cave enlargement will boost a potash outlay ability to about 3 million tonnes a year, during a cost of about $1,500 a tonne.

In terms of potash prolongation volumes, Agrium is by distant a smallest of a 3 potash producers in Saskatchewan. It's much

incomparable rivals, Potash Corp and Mosaic already have outrageous expansions underway.

Within a entrance decade a 3 companies, that marketplace abroad potash sales by a singular corner venture, will comment for over 36 million tonnes of potash prolongation ability - equal to some-more than 50 percent of a world's stream prolongation capacity.

In addition, German potash miner K+S and tellurian mining hulk BHP Billiton are investing billions in Saskatchewan to build their possess potash mines in a province. BHP's due Jansen plan is approaching to turn a world's largest potash cave if a Anglo-Australian mining hulk pushes brazen with skeleton to rise a asset.

Potash, a common name for potassium chloride, a stand nutritious used opposite a globe, is usually mined in a handful of countries. Canada, Belarus and Russia comment for a immeasurable infancy of a world's prolongation and exports.

Growing food pellet direct from rising economies like China, India and Brazil has put vigour on farmers to boost pellet reserve and spurred flourishing direct for potash and other macro nutrients.

Strong pellet prices and rising potash prices stirred BHP to make a $39 billion bid for Potash Corp in 2010. The antagonistic offer unsuccessful after a Canadian supervision stepped in to retard a takeover.

Agrium pronounced engineering and construction work on a enlargement will be conducted by a corner try between SNC Lavalin and PCL Industrial Management Inc.

The infancy of a plan construction is approaching to take place in 2012 and 2013, with execution projected by a second half of 2014.

Agrium's U.S.-listed shares rose 12 cents to $65.29 in early trade on a New York Stock Exchange on Wednesday, while a Toronto-listed shares rose 41 Canadian cents to C$67.90.

(Reporting by Euan Rocha in Toronto and Gowri Jayakumar in Bangalore)

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