LANIGAN POTASH MINE

Potash Corp reported that it has produced 3.405 Mt potash in 2009. Available supplies were limited by labor disputes at three of their mines while demand fell due to the start of the global economic crisis in late 2008. Pattern of offshore potash shipments were altered in 2008 by a late contract settlement between Canpotex and China. India benefited from China’s late entry to the market, receiving nearly 60 percent more potash from Canpotex than in 2007. North American sales volumes fell as farmers mostly passed on a fall application due to the late harvest and unfolding global economic concerns.

The company reported reserves and resources for its Canadian mining operations. The company’s estimates for its conventionalmining operations in Saskatchewan are based on exploration drill hole data, seismic data and actualmining results during the past 38 to 43 years. In Saskatchewan reserves are estimated by identifyingmaterial in place that is delineated on at least two sides and material in place within one mile from an existing sampled mine entry or borehole. The company’s estimates for its conventional mining operations in New Brunswick are based on exploration drill hole data, seismic data and actual mining results during the past 25 years. In NewBrunswick reserves are estimated by identifying material in place delineated by drilling or mining with results projected conservatively from these intersections.

Construction will bring back idled potash capacity of 1.5 million tonnes, including the mill refurbishment and expansion of surface, hoisting and underground facilities, was substantially completed at the end of the second quarter of 2008. In 2007, the mine produced a total of 1.9 Mt of potash (KCl). Lanigan's CDN $410 million debottlenecking and compaction expansion project primarily entails refurbishing the Phase One mill that has been idle since the mid-1980s. There was a substantial increase in hiring in 2007 to prepare for commissioning of the Phase One mill in 2008. The division hired 69 new employees and promoted another 19. A shortage of skilled trades and mining engineers has presented a challenge to achieving desired manpower levels. (Dec/07) A new mill with a capacity of 2 million tonnes per year was completed in 1987, which brings the overall capacity of the operation to 3.8 million tonnes per year.