* Cites higher expenses for equipment and personnel
* Plans to own, not rent, harbour installations in Vancouver
* Legacy mine to start production in mid-2016, not end-2015
* Shares down 3.3 pct, hit lowest in five months
(Recasts, adds shares, CEO quote, background)
FRANKFURT, April 22 German potash miner K+S AG
has warned that a Canadian potash mine will absorb a
quarter more investment and would not come on stream for about
six months later than had been planned.
Its shares dropped 3.2 percent to 32.54 euros at 1347 GMT,
making it the second-worst performer on Germany's blue-chip DAX
index. The stock fell as low as 32.075 euros, its
lowest since late November.
K+S is splashing out on developing the Legacy mine in
Canada's Saskatchewan province in a bid to become less dependent
on limited domestic reserves of the fertiliser ingredient.
Yet spending on mine would now be C$4.1 billion ($4.0
billion), up from a previous budget of C$3.25 billion, partly
because K+S decided to invest in its own installations at the
port of Vancouver where it had previously planned to rent, the
company said on Monday.
The start of production would be delayed to mid-2016 from
the end of 2015 as previously forecast, the world's
fourth-largest potash supplier added.
It would still, however, ramp up annual production at the
site to 2 million tonnes by the end of 2017, adding to the
group's current capacity of 7.5 million tonnes of potash and
Facing up to exhausting its domestic potash reserves in
about four decades, K+S in 2010 bought Potash One and its
license to exploit the Legacy deposit. The group, formerly owned
by BASF, said the business rationale remained intact.
"Taking all data of the profitability calculation into
account, the project is economically attractive and still
fulfils the requirement of the group to earn a 15 percent
premium on the cost of capital before taxes," K+S Chief
Executive Norbert Steiner said in a statement.
The additional funding would come from existing liquidity,
future cash flows and new debt, he added.
Mining rivals have recently been hesitant or unwilling to
bring new potash mining projects on stream.
Brazil's Vale, the world's No. 2 miner, said last
month the Rio Colorado project in Argentina was no longer
economically viable, while BHP Billiton has yet to give
final approval to a potash project in Western Canada.
($1 = 1.0260 Canadian dollars)
(Reporting by Ludwig Burger and Andreas Kroener; Editing by