By Karen E. Thuermer, AJOTPotash is a business to be in these days. In Saskatchewan, Canada, the industry is regarded red-hot as companies and mines there work to meet the growing demands in global food production. One of world’s leading producers and marketers of concentrated phosphate and potash crop nutrients is The Mosaic Company. While its biggest market is North America, exports outside of Canada and the United States represent its highest growth potential. That’s because in April Canpotex Limited, the export association of Saskatchewan potash producers, signed an agreement to supply Sinofert in China with one million tons of potash for the rest of 2008 at a $400 per ton increase over 2007 prices. Mosaic also announced in April a long-term potash capacity expansion plan in Saskatchewan in response to continuing robust global demand for potash. That combined with expansion announcements last year, bring Mosaic’s annual capacity to approximately 5.1 million metric tons. Upon completion of these expansions, Mosaic’s total annual capacity will approximate 15.5 million tons, maintaining Mosaic as one of the premier potash companies in the world. The expansions are projected to occur over the next twelve years, with the first expansion production coming on line in 2009. Some of the expansions are already underway while others are in the planning and approval stages. In addition to these expansions, approximately 1.3 million tons of annual capacity will revert to Mosaic within the next few years. “Our focus for the future is shipping offshore and growing export markets,” says Norm Berg, senior vice president of Mosaic’s potash operations in Regina, Saskatchewan. CANPOTEX’S ROLE Canpotex maintains the lead as the world’s largest potash exporter. Canpotex ships Mosaic potash to the world, with the exception of Eastern Europe and Russia. “These areas are supplied by potash companies operating in Russia and Belarussia,” states Berg. Belarussia, itself, is home to one of the world’s largest potash reserves. Because Canpotex represents the entire Saskatchewan potash industry and ships in excess of 10 million metric tons worldwide to countries like Australia, Brazil, China, India, Indonesia, Japan, Korea, and Malaysia, it enjoys significant economies of scale. Its marketing team maintains direct contact with buyers around the world while its operations group communicates daily with Mosaic and other member producers as well as mine sites, railways, and terminals to ensure cargo availability and timely loading of vessels at the load port. RAIL TRANSPORT The majority of the shipments move in unit trains that traverse the rugged Canadian landscape often through extreme weather from the mines in Saskatchewan 1,600 kilometers west to the deep-water ports of Vancouver, BC and Portland, OR. The trains are operated by Canadian Pacific Railways, with which Canpotex has a contact. Each train is made up of 124 railcars and can carry nearly 13,000 tons of potash. “We own our own fleet rail cars through Canpotex,” Berg states. “These are specifically designed for potash. We get the maximum amount of payload out of the length of a rail car.” Canpotex continues to invest in its specialized railcar fleet, with over 3,500 railcars in dedicated potash service. Over the years, Mosaic has seen its fleet increase from 100 ton to 120 ton railcars. “Sometimes we have to bring leased cars into the fleet,” Berg reveals. Obviously, as world demand for potash increases, and companies like Mosaic expand their mine operations, demand for capacity on rail service will surmount. “Strategically, we are growing our fleet through Canpotex to match the growth of our expected sales,” Berg says. “We are keeping train efficiencies up in terms of train turn times and getting them back as quickly as we can, thereby managing the fleet so that we minimize the amount of car cleaning we have between product lines.” Berg foresees issues whereby the railways will have t