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Near-term Potash Producers Ramping Up

Near-term Potash Producers Ramping Up

Now that key potash supply contracts have been inked with China and India, confidence has returned to the potash sector. But just how much new potash supply is required and where it will come from is still unknown.

Currently, a number of potash projects are in a variety of development stages, and many have plans to begin production soon. Although some projects are located in established regions like Saskatchewan and Eastern Europe, a number of projects are opening investors' eyes to the potential of regions like the US, Brazil and Africa.

Below, organized by region, is a list of some of the potash projects that are expected to reach production in the next two to three years.

Saskatchewan

Legacy potash mine, K+S Potash Canada: K+S attained the Legacy mine through its $434-million acquisition of Potash One, a junior, in 2010. The company broke ground on the $3.25-billion project in June 2012. Once completed, it will be the first greenfields potash mine built in Saskatchewan in almost 40 years. Production is expected to begin at the end of 2015 at a rate of 2 million metric tons (MT) of potash per year.

Milestone solution potash mine, Western Potash (TSX:WPX): Western  received approval for the Milestone project's environmental assessment late last month, and is now one step closer to beginning construction on a solution potash mine that would produce 2.8 million MT per year for the 40-year lifespan of the project. The Milestone project could begin construction as early as mid-2013 if Western can acquire the remaining financing to fund the $2.8-billion project. That would allow it to begin production as early as 2016.

Jansen potash project, BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT): BHP's board is rumored to be bringing the Jansen project back from hiatus and could begin production in 2013, The Sydney Morning Herald reported.

Expected to become the world's biggest potash mine, with production starting at 4 million MT per year and eventually rising to 8 million MT per year, the $12-billion project is certainly one of the largest potash projects on the horizon.

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