NEW TAX CHANGES TO GROW POTASH INDUSTRY

Released on April 11, 2005

New tax initiatives announced today will stimulate significant expansion in Saskatchewan's potash industry, resulting in more jobs and increased wealth for the province.

"The changes are designed to ensure that Saskatchewan remains the dominant player in the growing international potash industry. World demand for potash is increasing with population and income growth in developing countries," Industry and Resources Minister Eric Cline said. "Saskatchewan potash producers are currently enjoying record sales, but there is still ample room for expansion. As a government, we want to promote that expansion and grow our economy."

The changes provide a ten year tax holiday from base payments on expansions of potash mines, which exceed productive capacity of 200,000 tonnes of potassium chloride (KCl) per year. The province is also providing a capital investment incentive to promote expansion of production. The changes will result in hundreds of millions of dollars in new capital investment by the industry and more than 200 permanent jobs. Jobs in the mining sector are the highest paid jobs in Saskatchewan.

Potash is the largest mining industry in the province. It employs approximately 6,000 people and generates approximately $370 million in royalties and taxes for Saskatchewan.

The value of potash sales in 2004 was $2.2 billion at a record high of 16.4 million tonnes, up from the previous record of 14.4 million tonnes in 2003. Saskatchewan accounts for more than 30 per cent of the world potash production and 45 per cent of the world potash trade.

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For More Information, Contact:

Bob Ellis Industry and Resources Regina Phone: (306) 787-1691