EANS-News: K+S Aktiengesellschaft / Expansion of potash capacities Green Light for Legacy Project in Canada

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Company Information/K+S Aktiengesellschaft

Subtitle: K+S Aktiengesellschaft / Expansion of potash capacities
Green Light for Legacy Project in Canada

Kassel (euro adhoc) - Kassel, Germany - November 29, 2011

Expansion of potash capacities
Green Light for Legacy Project in Canada

• The Supervisory Board approved the plan of the Board of Executive
Directors of total capital expenditure of CAD 3.25 billion (about EUR
2.4 billion) • Total capacity of 2.86 million tonnes of potassium
chloride p.a. expected in 2023 • Start of production and first
volumes expected in 2015 • Further expansion of production capacity
to 4 million tonnes of potassium chloride p.a. possible in the
long-term • The Legacy Project is one of the world´s economically
most attractive potash greenfield projects

The Supervisory Board of K+S Aktiengesellschaft approved the plan of
the Board of Executive Directors to implement the Legacy Project in
the Canadian province of Saskatchewan. For this purpose, capital
expenditure totalling 3.25 billion Canadian dollars (CAD,
equivalent to about EUR 2.4 billion) have been approved.

"The Legacy Project is a significant step towards the expansion of
our potash capacities and enables us to participate in the growth
of the global potash market. Together with our existing
potash mines in Germany, this will considerably strengthen
the international competitiveness of K+S and consequently
benefit the entire K+S Group in Europe and overseas," says Norbert
Steiner, Chairman of the Board of Executive Directors of K+S.
"Furthermore, the new site will have a positive impact on our
average production costs and increase our flexibility," Steiner
continues.

Feasibility study revised and optimised K+S had acquired the Canadian
exploration and development company Potash One (now K+S Potash
Canada), at the beginning of 2011, and has been revising and
optimising the existing feasibility study over recent months. A
concept was developed, which is optimally consistent with the
production and market forecasts of K+S and demonstrates very
positive viability.

Production start in 2015 Initial infrastructure construction works
in the areas of water supply, electricity and road development
as well as drilling activities have already begun at the site.
Through to 2015, K+S will develop a potash production based on
solution mining in southern Saskatchewan with first quantities of
potassium chloride. By 2017 the two million tonne mark shall be
reached. This will be followed by the gradual expansion of
production capacity to 2.86 million tonnes by 2023.

In a further expansion phase, total output of 4 million tonnes of
potassium chloride annually would be achieved about ten years later.

Attractive potash deposit with high material content The Legacy
Project area is located about 50 km north of the city of Moose Jaw
(Saskatchewan). The initial exploration area at the Legacy Project,
which only makes up a fraction of the total permitted area of K+S
Potash Canada (formerly Potash One), has proven reserves of 160
million tonnes of final potash product. Considering the target
annual production, this results in a useful life of more than 55
years, including the ramp-up curve. At about 18%, the K2O content
is significantly higher than that of the German sites and will
therefore enable more efficient and more economic extraction. The
remainder of this one potash lease area contains additional
resources of almost a billion tonnes of potassium chloride.

Strong economic attractiveness The sharp ramp-up curve means that the
project in 2016 already will probably be significantly positive in
terms of EBITDA and that EBIT practically should reach the
profit threshold. In the coming years, parallel to the ramping up
of production capacity, substantial contributions to earnings can be
expected.

"Our Legacy Project is one of the world´s economically most
attractive greenfield projects," says Joachim Felker, member of the
Board of Executive Directors of K+S Aktiengesellschaft whose
responsibilities include the Potash and Magnesium Products
business segment. "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," continues Felker.

Expanding the global presence of K+S The Legacy Project supplements
the existing German production network of K+S with an important
North American site. This makes possible a unique
diversification of production among potash producers. In future, the
new site will be the starting point primarily for sales to the
emerging growth markets of Asia and South America as well as in
North America. K+S will carry out distribution via its tried and
tested infrastructure.

Financing of the project on a solid basis With a level of
indebtedness of under 25%, the K+S Group enjoys a very solid
balance sheet structure. The financing of the Legacy Project should
be able to be provided predominantly from liquidity and future cash
flows. The refinancing of the bond maturing in 2014 is assumed in
this.

K+S also intends to maintain its existing, essentially
earnings-driven dividend policy with a payout ratio of 40 to 50% of
adjusted Group earnings after taxes and, moreover, strive to retain
its "Investment Grade" rating.

Further expansion potential exists In addition to the Legacy Project,
over the coming years, K+S will also explore in more detail the
other permit areas taken over from Potash One in southern
Saskatchewan. Due to the limited geological data, the deposits there
cannot yet be divided into resources and reserves. However, the
exploration permits are located in areas of known geologically
high-quality potash deposits in Saskatchewan and should for that
reason constitute a future potential that is not to be
underestimated. Therefore, a Legacy Project II or III cannot be
ruled out in the future.

Advantages for the province of Saskatchewan With Legacy, the first
greenfield potash project in over forty years will be implemented
in Saskatchewan. At present, around 30 people are employed at K+S
Potash Canada in Saskatoon. During the construction phase, more
than 1,000 people will be working on the site during peak times. In
its final expansion stage, the new K+S site will employ more
than 300 people. Additionally, external contractors will support
the brine plant and plant operations over the long term.

Assuming annual production of 2.86 million tonnes of KCl and on the
basis of current potash prices, the province of Saskatchewan will
in future receive considerable income in the form of taxes and
royalties.

Experience growth The K+S Group is one of the world's leading
suppliers of standard and speciality fertilizers. In the salt
business, K+S is the world´s leading producer with sites in
Europe as well as North and South America. K+S offers a
comprehensive range of goods and services for agriculture,
industry, and private consumers which provides growth opportunities
in virtually every sphere of daily life. The K+S Group employs more
than 14,000 people. The K+S share - the commodities stock on the
German DAX index - is listed on all German stock exchanges (ISIN:
DE000KSAG888, symbol: SDF). Further information about K+S can be
found at www.k-plus-s.com and information about the Legacy Project
and K+S Potash Canada at www.ks-potashcanada.com.

Note to editors We are offering a conference call with members of
the Board of Executive Directors for investors and analysts
in English today at 2:30 p.m. Shareholders, investors,
representatives of the press and all other interested parties are
invited to follow the conference via a live webcast at
(http://www.k-plus-s.com/kspcen) or by phone under
+49-(0)69-71044-5598. The presentation of the conference call can be
found on our website. The conference will be recorded and will also
be available as a podcast.

Your contact persons:

Press:
Michael Wudonig, CFA

Phone: +49 561 9301-1262
Fax: +49 561 9301-1666
michael.wudonig@k-plus-s.com

Investor Relations:

Christian Herrmann, CFA
Phone: +49 561 9301-1460
Fax: +49 561 9301-2425
christian.herrmann@k-plus-s.com

Forward-looking statements This press release contains
forward-looking statements that are subject to various risks and
uncertainties. Such statements represent management's best
judgment as determined on the basis of all the information currently
available. Statements in this press release other than purely
historical information as well as statements on future plans and
objectives or on expected results constitute forward-looking
statements. Forward-looking statements are based on numerous
assumptions and are subject to all business-related risks
and uncertainties. The companies assume no obligation to update the
forward-looking statements contained herein.

Further inquiry note:
Press:
Michael Wudonig, CFA
Phone: +49 561 9301-1262
Fax: +49 561 9301-1666
michael.wudonig@k-plus-s.com

Investor Relations:
Christian Herrmann, CFA
Phone: +49 561 9301-1460
Fax: +49 561 9301-2425
christian.herrmann@k-plus-s.com

end of announcement euro adhoc
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company: K+S Aktiengesellschaft
Bertha-von-Suttner-Straße 7
D-34131 Kassel
phone: +49 (0)561 9301-1460
FAX: +49 (0)561 9301-2425
mail: christian.herrmann@k-plus-s.com
WWW: http://www.k-plus-s.com
sector: Chemicals
ISIN: DE000KSAG888
indexes: DAX, Midcap Market Index, CDAX, Classic All Share, HDAX, Prime All
Share
stockmarkets: official dealing/prime standard: Frankfurt, regulated dealing:
Stuttgart, München, official dealing: Berlin, Hamburg, Hannover
language: English