Plans for Legacy potash mine still on track

August 13, 2013

Despite the recent shake up in the potash sector from the break up of the Belarusian Potash Company (BPC), (ME, July 31).

K+S AG, Europe’s biggest potash producer, said its new Legacy mine in Canada is proceeding on schedule. “We see no reason to call this forward-looking project into question because of mere speculation,” Chief Executive Officer Norbert Steiner said in a video on company’s website. “We have seen phases of market disruption in the past and we know how to deal with them.”

K+S abandoned its full-year forecast for sales and earnings growth shortly after Russian competitor OAO Uralkali pulled out of the Belarusian Potash Co. trade cartel for potash, causing the German company’s stock price to slump 30 percent since the end of July, Bloomberg reported.

Several small potash deals struck early in August indicated a price drop of about $55/t ($50/st), Jeremy Redenius, an analyst at Sanford C. Bernstein, said in a report on Aug. 9. That compares with $440/t ($400/st) for previous shipments by the cartel to China.

In contrast to competitors exclusively focused on potash, K+S has a “second pillar” in the form of its salt business, Steiner said today. K+S generated about 38 percent of revenue from the salt unit last year.

The company is sticking to plans for about 375 million euros in investments this year at the Legacy mine in Saskatchewan, K+S said. The German potash producer also said the mineral composition at mines in its home country are the only ones in the world that contain magnesium and sulfur in addition to potassium. The specialized fertilizer it derives from that make-up are only affected to a limited extent to volume competition from standardized products.



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