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Potash mine delay causes little concern

Concern appeared to be muted after Brazilian mining giant Vale SA's postponed a $3-billion potash project in Saskatchewan. Vale said challenging economic times do not make the mine at Kronau, southeast of Regina, feasible right now.

Concern appeared to be muted after Brazilian mining giant Vale SA's postponed a $3-billion potash project in Saskatchewan.

Vale said challenging economic times do not make the mine at Kronau, southeast of Regina, feasible right now.

Municipal Reeve Erwin Viettl says he had been assured the project will go ahead, just not next years as originally planned.

The delay is disappointing to the community, but, on the other hand, nobody had made any big plans yet, Vietl said.

Saskatchewan Economy Minister Bill Boyd says Vale faced investing and financing difficulties and needed to regroup.

The economic impact of the delay will be minimal on the province, Boyd said.

"Really, nothing in the short term," he said Friday. "They are not producing potash currently and wouldn't be for several years even if they were moving ahead right now.

"They're not planning layoffs of any people or anything of that nature."

Given Vale's circumstances, the delay is not surprising, Boyd said.

"We expect at some point they'll be going forward. We're seeing a tremendous amount of investment in the potash sector in Saskatchewan."

Viettl said he is confident the potash mine will go ahead.

"It's not going to happen within the timeline they had all the meetings about, but they are still totally committed to this project," he said.

The mine was to employ more than 1,500 workers during construction and create up to 500 permanent jobs once opened. It was expected to produce up to an annual 2.9 million metric tonnes of potash, a key ingredient in fertilizer.

Vale said there is no firm timeline on when construction of the potash mine will begin, but it is still part of the company's "longer-term plans."

"We have been in conversation with representatives of the Saskatchewan government and we impressed upon them that we still see some great opportunities for us in Saskatchewan," vice-president Corey McPhee said from Toronto Thursday.

"But this is one project that is going to take a little longer."

Vale has been producing potash in Brazil for about 16 years.