11 July 2013 22:50 [Source: ICIS news]
HOUSTON (ICIS)--K+S Potash Canada and Canadian Pacific Railway have agreed on an exclusive long-term contract to transport potash from the fertilizer producer’s new mining project and production facility in Saskatchewan, the companies announced on Thursday.
As the first greenfield potash mine to be built in Saskatchewan in nearly 40 years, the Legacy Project is expected to start operations by the summer of 2016 and reach a production rate of nearly 2m tonnes by the end of 2017.
K+S officials said the company is investing $4.1bn (€3.2bn) Canadian dollars into the mine and production facility, which will be located near Moose Jaw.
While no financial terms of the volume-based contract were disclosed, the agreement does call for Canadian Pacific to move the potash from the Legacy site to western ports for overseas deliveries and to utilize the railroad’s existing network to send shipments to domestic and US markets.
“We are glad to have found Canadian Pacific as the perfect partner and strategic fit for our transportation needs in Canada. Canadian Pacific offers excellent logistics service, and we are looking forward to this long-term partnership,” said Ulrich Lamp, K+S CEO.
Canadian Pacific said that in order to competitively serve the needs of the Legacy Project, it will be constructing an exclusive railroad spur to provide direct access to and from the site.
“The capacity, flexibility and market access of Canadian Pacific’s network on our western corridor, as well as efficient route options into the United States, ensures a growth opportunity for both companies,” said Keith Creel, CP president.
($1 = €0.78)
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