Agrium Inc. has announced that it plans to proceed with a 310,000 tonne potash expansion at its Vanscoy, Saskatchewan potash mine. This would bring Agrium's total potash capacity to 2.1 million tonnes. Construction is scheduled to begin July 2005 with the additional production available in the third quarter of 2006. Agrium is also evaluating an additional similar sized expansion to further increase mine capacity.

"We expect global supply and demand for potash to remain tight for the foreseeable future and remain committed to meeting the challenge of supplying the growing global demand for all nutrients," said Mike Wilson, President and CEO of Agrium.

"The announcement by the Saskatchewan Government providing tax relief for new potash investment has put us in a position where we can now obtain final approval for this project. The expansion will benefit the Saskatchewan economy as well as Agrium's customers and shareholders."

Agrium will invest approximately US$65-million in this project, employing 70 workers during the construction phase and creating up to 23 new full-time positions once the expansion is operational.

The Saskatchewan Government announced two major changes to the provincial potash tax structure last week that favorably impact the economics of the expansion projects. The first provides a 10-year tax holiday from base payments on expansions of potash mines which exceed productive capacity of 200,000 tonnes of potassium chloride (KCl) per year. The province is also providing a capital investment incentive to promote expansion of production.

Agrium is the third largest potash producer in North America. Our Vanscoy mine directly employs over 380 people. In 2004, Agrium produced 1.7 million tonnes of potash with total sales in excess of US$200-million.

Source: Company release