22 February 2014 00:01 [Source: ICIS news]
HOUSTON (ICIS)--The expansion to Agrium's potash mine in Saskatchewan is going to cost 25% more than expected due to extreme winter conditions and reduced labour productivity, the fertilizer producer said on Friday.
Speaking during a Q4 2013 earnings conference call, company officials said that construction efforts at the facility at Vanscoy have been hindered by unusually difficult weather, particularly the bitter cold and intense winds that have marked this winter in Canada.
Despite the delays, Agrium said that the project is around 65% complete, and the producer expects to complete the expansion, now calculated at $1.9m, before the end of 2014. It is anticipated that the enlarged operations will increase the company’s output of potash by as much as 60% per year by 2015, which would translate into as much as an additional 3.2m tonnes of the crop nutrient.
The weather conditions have also caused issues for Agrium shipping fertilizer to markets, similar to other producers who are growing increasingly concerned about logistical issues with full-scale plantings for spring crops expected to commence by mid-March.
Agrium CEO Chuck Magro said that the company is hoping that the worst of the conditions are behind it but added that the producer had suffered a modest loss in production volumes because it did not have sufficient storage and transportation to keep all of its facilities running at full capacity.
Magro said that Agrium is forecasting an increase in global potash shipments this year from to 56m-58m tonnes from the level of 54m tonnes last year.
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