According to the company, expansion at New Brunswick is strategically and logistically important, bacause the facility is located close to the company’s existing terminal at the Port of Saint John, with the shortest shipping times to key Latin American markets where substantial longterm growth in demand for upgraded potash products is expected. New Brunswick’s existing milling, distribution and port facilities can be leveraged to maximize the benefit of the company’s investment. Additionally, as the company experiences higher but stable brine inflows at the existing mine, mitigation costs there are expected to remain high over the long term. Water inflow is not expected to be an issue in the new mine. Substantially increasing production in Eastern Canada also further diversifies the sources of PotashCorp’s growing potash capacity.

Using conventional underground methods, the new mine will draw on the Picadilly deposit, which contains potash ore grades similar to those found in Saskatchewan deposits. This relatively flat deposit contains two potash seams, each varying in thickness to a maximum of 60 ft, and reportedly will allow for a stable, long-term, low-cost source of potash. Once fully developed, the new mine will replace the existing underground operation, while the current milling facility will be expanded by 1.2 million mt, including 750,000 mt of additional compaction capacity.

Because this new mine will be built adjacent to the company’s existing New Brunswick property and use some of its facilities, the company noted that construction can be completed in less time than the five to seven years typically projected for a greenfield potash operation, at a per-toncost 33% below the current estimate of $2.22 billion needed for 2 million mt of new production in Saskatchewan. Plans are to keep the existing mine and mill fully operational throughout the construction and new mine development process. The construction phase is expected to generate the equivalent of 2,500 person-years of employment, and 140 new full-time positions will be created upon completion. The project will be financed out of free cash flow and existing credit facilities.

The New Brunswick development is in addition to previously announced debottlenecking and expansion initiatives underway at the company’s Lanigan, Patience Lake and Cory operations in Saskatchewan, which are expected to increase PotashCorp’s productive annual capacity from 10.7 million mt to 13.7 million mt by the end of 2010.