UPDATE 1-Cost of expanding Agrium potash mine jumps on cold, wind

Fri Feb 21, 2014 12:24pm EST
 
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By Rod Nickel

Feb 21 (Reuters) - Canadian fertilizer producer Agrium Inc said on Friday the cost of expanding its Vanscoy, Saskatchewan potash mine had jumped 25 percent from the original estimate, after cold and windy weather hampered construction.

The Calgary, Alberta-based company plans to complete the project by the end of 2014, boosting potash capacity by 60 percent to as much as 3.2 million tonnes of the crop nutrient.

The Vanscoy project, which is about 65 percent completed, is now expected to cost nearly $1.9 billion.

"The weather has not only been cold, we've lost several days due to wind," Ron Wilkinson, Agrium's senior vice-president said on a conference call with analysts. "Productivity has been extremely poor."

Shares of Agrium climbed more than 2 percent in Toronto and New York trading.

The company reported a steep drop in quarterly profit on Thursday that was in line with expectations, and said global nitrogen and phosphate markets had firmed early this year.

Grain prices slipped last year, dragging down fertilizer prices. Global potash prices were further weakened after Russia's Uralkali OAO broke away from its joint trading venture with Belaruskali in July.   Continued...