Canada potash miners plan growth at underused port

By Roberta Rampton

WINNIPEG, Manitoba, June 25 (Reuters) - As Canadian potash miners push to double exports in the next decade, they will tap an underused western port to try to avoid congestion in the country's main Pacific Coast rail route, an official with export consortium Canpotex said on Wednesday.

Canpotex announced late Thursday that it will add about 11 million tonnes of shipping capacity by 2012, almost doubling its current capacity, with half coming from a brand new terminal at Prince Rupert, British Columbia, near the southern tip of the Alaska panhandle, north of Canada's main Pacific port in Vancouver.

"The opportunity is an underutilized rail corridor," said Ted Nieman, senior vice-president of Canpotex, which exports potash produced by Potash Corp (POT.TO), Mosaic Co (MOS.N) and Agrium Inc (AGU.TO) to markets like China, India and Brazil.

"That, of course, provides sufficient opportunity for long-term growth," Nieman said in an interview.

Tight supplies and soaring demand have pushed grain prices to record levels, pulling along fertilizer prices because farmers have the means and motivation to boost yields.

The boom has been particularly keen for producers of potash, a hard-to-mine nutrient produced only in a dozen countries, with a major deposit beneath the Canadian Prairies.

Prices for potash have tripled during the past year, and have not reached their peak, the chief executive of Potash Corp, the world's largest producer, said recently.

Canpotex shipped more than 9 million tonnes in 2007, and will sell close to 11 million tonnes in 2008, Nieman said.