Agrium Inc. plans to spend about $95 million over the next two years to develop a high quality phosphate deposit near Kapuskasing, Ont.
The new mine will mean the company will no longer have to import the rock from Togo in West Africa.
The Calgary-based company will also modify its Redwater, Alta. phosphate plant to enable it to process the new rock.
The high grade, low cost mine is expected to supply all of the phosphate rock required by the Redwater plant for about 20 years. Work on the project will begin immediately. The project is expected to be complete by 1999.
Read Also
Saskatchewan throne speech promises strong economy
Saskatchewan’s legislative agenda for the coming year will focus on meeting the challenges of new world trading relationships, said the speech from the throne.
“This is an economically and environmentally sound project…. The quality of the rock is exceptionally high,” said Agrium president and chief executive officer John Van Brunt in a release.
David Nichols, an Agrium spokesperson, said in an interview last week the reduced cost for the company wouldn’t directly lead to cheaper fertilizer for farmers.
“The price of fertilizer is set by the market. But getting the rock from Kapuskasing will, in fact, add about $38 million to the operating income of the company,” he said.
“It puts us in a more competitive position and reduces our costs.”
The Kapuskasing property, about 500 kilometres northeast of Thunder Bay, has undergone extensive engineering evaluations. The original deposit was drilled in 1954 by Continental Copper as a base metal project.
Roughly $20 million has been spent on the site over the years, and more than 350 holes have been drilled to determine the extent of the deposit.
The property was acquired by Agrium when it merged with Viridian Inc. in December 1996.
The new mine will employ conventional open pit mining techniques and no environmental issues of significance are anticipated, the company said. Rock will be transported from the property to Redwater in unit trains.
The Redwater plant has annual production capacity of 650,000 tonnes of monoammonium phosphate.
Procuring phosphate rock constitutes about 70 percent of the plant’s cost of production.
