Agrium Executes Long-Term Rock Agreement With OCP S.A.

Mon Sep 26, 2011 5:12pm EDT

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Agrium Inc. (TSX:AGU) (NYSE:AGU) announced today that it has executed a
long-term rock supply agreement with OCP S.A.("OCP") to purchase
phosphate rock to supply our Redwater, Alberta phosphate facility. The
phosphate rock from OCP will replace the phosphate rock currently
supplied from our mine at Kapuskasing, Ontario. The move to utilizing
rock from OCP is expected to take place in the second half of 2013 as
economic rock reserves at Kapuskasing will be depleted at that time. We
believe that OCP will be a reliable long-term supplier of high quality
phosphate rock.

    The agreement covers rock supply for a period up to 2020 at prices that
are based on a formula that tracks finished product pricing and key
published input costs. It offers downside protection to Agrium in periods
of low phosphate prices and also affords OCP an opportunity to benefit
from the upside when phosphate prices are strong.

    "Agrium has worked diligently to obtain a long-term phosphate rock
contract and expects the move back to utilizing imported rock to be a
seamless one. This will allow us to maximize production of MAP at our
Redwater facility in order to continue to meet the strong demand in our
core markets. It will also allow us to continue to benefit from the
significant sulphur and ammonia cost advantages and in-market location of
the Redwater facility. We believe this agreement signifies the start of a
significant partnership between Agrium and OCP, offering clear benefits
to both parties," stated Agrium's President and CEO, Mike Wilson.

    The supply agreement will come into full effect provided a number of
conditions are satisfied prior to December 31, 2011, including one
relating to an Agrium Board approval.

    Agrium's Redwater phosphate facility accounts for approximately half of
Agrium's phosphate production capability. Redwater's annual rock
consumption is approximately one million tonnes and the plant has P2O5
capacity of 345,000 tonnes, virtually all of which is upgraded to MAP
(MAP capacity of 660,000 tonnes). Our other significant phosphate
facility is located in Conda, Idaho and has its own integrated phosphate
rock mine.

    Agrium developed the Kapuskasing mine in the late 1990's to replace
phosphate rock which had previously been purchased from Togo. The
Kapuskasing, Ontario mine is located approximately 2,500 kilometres east
of the Redwater facility. The mine provided an excellent return on
investment over the past decade.

    About Agrium

    Agrium Inc. is a major Retail supplier of agricultural products and
services in North America, South America and Australia and a leading
global Wholesale producer and marketer of all three major agricultural
nutrients and the premier supplier of specialty fertilizers in North
America through our Advanced Technologies business unit. Agrium's
strategy is to grow across the value chain through acquisition,
incremental expansion of its existing operations and through the
development, commercialization and marketing of new products and
international opportunities. Our strategy places particular emphasis on
growth opportunities that both increase and stabilize our earnings
profile in the continuing transformation of Agrium.

    Forward-Looking Statements

    Certain statements and other information included in this press release
constitute "forward-looking information" within the meaning of applicable
Canadian securities legislation or constitute "forward-looking
statements" within the meaning of applicable U.S. securities legislation
(together, "forward-looking statements"). All statements in this press
release, other than those relating to historical information or current
conditions, are forward-looking statements, including, but not limited
to, statements as to management's expectations with respect to, among
other things, the satisfaction of conditions necessary for completion of
the agreement as contemplated and the ability to successfully utilize the
phosphate rock within our existing production facilities in a timely and
cost-effective manner. Such forward-looking statements involve known and
unknown risks and uncertainties, many of which are beyond our control, as
well as various assumptions and business sensitivities, including those
risk factors referred to in the MD&A section of the Corporation's most
recent Annual Report to Shareholders as well as those risk factors
described in the Corporation's most recent Annual Information Form, which
may cause actual results, performance or achievements of the Corporation
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Agrium disclaims any intention or obligation to update or revise any
forward-looking statements in this press release as a result of new
information or future events, except as may be required under applicable
Canadian securities legislation or applicable U.S. federal securities

Agrium Inc.
Investor/Media Relations:
Richard Downey
Vice President, Investor/Corporate Relations & Market Resear
(403) 225-7357

Agrium Inc.
Todd Coakwell
Manager, Investor Relations
(403) 225-7437

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