Winnipeg Free Press - PRINT EDITION

Potash mine delay gets shrug in Sask.

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REGINA -- Concern appears to be muted over Brazilian mining giant Vale SA's decision to postpone a $3-billion potash project in Saskatchewan.

Vale says challenging economic times don't make the mine at Kronau southeast of Regina feasible right now.

Municipal reeve Erwin Viettl says he's been assured the project will go ahead, just not next year as originally planned.

He says the delay is disappointing to the community, but on the other hand, nobody had made any big plans yet.

Saskatchewan Economy Minister Bill Boyd says Vale is going through investing and financing difficulties now and needs to regroup.

Boyd says the economic impact of the delay will be minimal on the province.

"Really nothing in the short term," he said Friday. "They're not planning layoffs of any people or anything of that nature."

Boyd said that given Vale's circumstances, the delay isn't surprising.

"We expect at some point they'll be going forward. We're seeing a tremendous amount of investment in the potash sector in Saskatchewan."

Viettl said he's confident the potash mine will go ahead.

"It's not going to happen within the timeline they had all the meetings about, but they are still totally committed to this project."

The mine was to employ more than 1,500 workers during construction and create up to 500 permanent jobs once opened. It was expected to produce up to 2.9 million metric tonnes annually of potash, a key ingredient in fertilizer.

Vale has said there is no firm timeline on when construction of the potash mine will begin, but it is still part of the company's "longer-term plans."

"We have been in conversation with representatives of the Saskatchewan government, and we impressed upon them that we still see some great opportunities for us in Saskatchewan," vice-president Corey McPhee said from Toronto on Thursday.

Vale has been producing potash in Brazil for about 16 years, but wants to become a major global player.

The announcement came the same day the Potash Corp. of Saskatchewan Inc. announced a month-long inventory-related shutdown at its Lanigan potash mine. The ongoing drought that's been ravaging the U.S. Midwest this summer has raised questions about future demand for fertilizer.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 18, 2012 B8

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