The globe’s fifth largest potash producer, and number one producer of salt, has committed to investing over $3 billion in a new potash mine in the R.M. of Dufferin, about 38 kilometers northeast of Moose Jaw. K+S Potash Canada, a wholly owned subsidiary of the German K+S Group,is working to open the first new potash mine in Saskatchewan in nearly 40 years. Their head office is located in downtown Saskatoon, and though they currently have only 40 employed with the company, that will skyrocket to over 1000 employees and contractors in 2013, when the mine is at the peak of construction. The Legacy Project was green lighted by K+S Potash Canada’s parent company on November 29, 2011.
K+S Group, the parent company of K+S Potash Canada, agreed in late 2010 to launch a friendly takeover of Potash One, a small Canadian-based company which held several potash exploration permits here in Southern Saskatchewan. The German company is the world’s fifth largest potash producer, and already operates a salt plant in the province near the existing Mosaic potash mine in Belle Plaine. It has a long history in the mining business, and is the only commodities stock on the German benchmark index DAX, the stock index composed of that nation’s 30 largest listed companies.
So why invest in Saskatchewan? “Our Legacy Project is one of the world’s economically most attractive greenfield projects”, says Joachim Felker, member of the Board of Executive Directors of K+S Aktiengesellschaft, whose responsibilities include the Potash and Magnesium Products business segment. “The benefits of the project include the already existing very good infrastructure, the significantly earlier availability of product that solution mining brings.” The North American site will also act as a supplement to the existing German production network, opening the possibility of unique diversification of production amongst global potash producers. The new site will act as the starting point for sales to the emerging growth markets of Asia and South America, as well as the rest of North America. K+S Group will continue to carry out distribution of potash globally via its tried and tested infrastructure.
The Legacy Project will not only be a great asset to K+S Group, it will also serve as a significant economic benefit to Saskatchewan. It’s estimated that the project will create roughly 6 million hours of direct employment during its construction, with another 1 million hours being required for indirect employment. The project will become a valuable new customer for Saskatchewan’s public utilities, with a new natural gas line needed from Transgas, telecommunications lines from SaskTel, electrical transmission lines from SaskPower, and a water pipeline from SaskWater. Recruitment of First Nations and Metis people, and use of contract services owned by First Nations and Metis people will also be a high priority for K+S Potash Canada. The construction and operation of the new economic development project will also mean substantial additional tax revenues for the federal, provincial, and municipal levels of government, resulting in tax dollars estimated in the millions of dollars.
With Saskatchewan quickly becoming Canada’s most economically successful province, K+S Potash Canada’s beginning in our province is well timed. “We’re very proud of the Legacy Project,” says Franz Spachtholz, K+S Potash Canada’s Vice President, Engineering. “We’re anxious to work with all of you to make it an important addition to Saskatchewan’s growing success.”
Copyright © BUSINESS View February/March 2012: "Germany's K+S Group sets its sights on the province"