A German fertilizer company has approved C$3.25 billion in spending for a new potash mining operation in Saskatchewan.
The K+S group said Tuesday it expects to have more than 1,000 people working on construction at peak periods and employ 300 when the site hits full production.
"Even if people do not normally attribute the term enthusiasm to the Germans, believe me, we are enthusiastic," K+S chairman Norbert Steiner said on a conference call with investors.
"The legacy project perfectly fits into our strategy — it's economically attractive, technically state of the art and solidly financed."
Production from the proposed Legacy mine, about 50 kilometres north of Moose Jaw, Sask., is expected to begin in 2015 and ramp up over the next few years. K+S acquired the project when it bought Vancouver-based Potash One earlier this year.
Legacy will occupy only a small area of the property acquired in the Potash One deal, Steiner said, and the company will continue to explore for other areas rich in the mineral.
"The Legacy project alone, which only makes up a fraction of the total permit area, has proven reserves of 160 million tonnes of potassium chloride with a target annual production and including the ramp-up curve, this results in a useful life of more than 55 years," Steiner said.
However, "project Legacy 2 or 3 should not be ruled out in the future."
Saskatchewan has the world's largest supply of potash, a mineral used to create fertilizers that promote crop growth and improve food production.
It has increasingly attracted attention from foreign mining companies, including Anglo-Australian mining giant BHP Billiton, which tried to buy Potash Corporation of Saskatchewan (TSX:POT) last year but was blocked by the federal government.
BHP Billiton also has its own Jansen potash operation under development in the province but PotashCorp, which had resisted the $40-billion hostile takeover attempt, argued its own operations were more economical.
K+S said Tuesday that the assets it acquired from PotashOne are among the world's most economically attractive startup projects.
"The benefits of the project include the already existing very good infrastructure, the significantly earlier availability of product that solution mining brings and, not least, our many years of expertise as an established potash producer," said Joachim Felker, a member of the K + S board of executive directors.