	DIG DEEPER INTO THE Business of Potash here are the basics: Scroll
Potash Basics	Potash is a vital and replenishing agriculture fertilizer used worldwide to grow healthy crops	Potash is also used to make industrial products and pharmaceuticals	Canada has the largest and richest potash resources on the globe, and could supply the needs of farmers worldwide for several hundred years	Canada has approximately half the world’s potash reserves
	How it’s Mined & Processed STEP 1 Potash is brought to the surface from about a kilometre underground either as a solid or dissolved in liquid form Step 2 It’s processed in mills to separate out the “K” (potassium) Step 3 Further processed into various sizes and types of products. Step 4 From here, it’s stored in large warehouses for shipping where it will be later loaded into train cars or trucks
The Canadian Potash Industry There are 3 companies producing and selling potash in Canada as well as 8 greenfield projects in various stages in Saskatchewan	Current Potash Projects Canada As of 2023, there are 3 potash projects under development by Canada’s potash industry. Russia / Belarus / China As of 2023, there are 9 projects underway in Russia, Belarus, and China
Global Players Outside Canada	Russia Exporters: Uralkali and Eurochem Belarus Exporters: Belaruskali Israel Exporters: ICL Chile Exporters: SQM China Laos* Exporters: Lao Kaiyuan and Asia-Potash *Chinese-owned Source: CRU/IFA
Global Potash Production	POTASH PRODUCTION PER MINE BASED ON 2021 ESTIMATES
	Where Canadian Potash Goes	95% is exported out of Canada Major markets: US, China, Brazil and India; 40 countries world-wide Potash is transported both by the producers themselves and for some, through Canpotex (a joint venture owned by Mosaic and Nutrien) The three main producers own or lease specialized railcars to move product through their own supply chains Potash is moved by train and relies on the services of CN and CP Rail Canpotex markets and delivers Canadian potash through their fleet of 5,000 customized railcars to port terminal facilities in Portland, Oregon, Saint John and Vancouver Rail cars are emptied into large containers and put on ocean-going vessels for global shipments
Journey of a Rail Car of Potash Step 1 Each rail car carries 100 MT of potash (based on weight). Step 2 Once filled in Canada, cars move by rail to main hubs like Winnipeg or Chicago for domestic transport. Step 3 International cars head to ports on the East or West coast. Step 4 For Canpotex, it takes around a week to move potash from Saskatchewan to the coast. Step 5 Domestically, it can take over a month to get potash to its final destination by rail-only. Step 1 Each rail car carries 100 MT of potash (based on weight). Step 2 Once filled in Canada, cars move by rail to main hubs like Winnipeg or Chicago for domestic transport. Step 3 International cars head to ports on the East or West coast. Step 4 For Canpotex, it takes around a week to move potash from Saskatchewan to the coast. Step 5 Domestically, it can take over a month to get potash to its final destination by rail-only.
The Cost to Produce Potash Companies producing potash in Canada have the highest business costs in the world New, unexpected costs can’t be passed along to the end user Like any business or industry, companies selling Canadian potash are trying to lower costs to stay competitive	COST PER TONNE 1 British ton (long ton) = 1,016 kg or 2,240 lbs \| 1 U.S. ton (short ton) = 907 kg or 2,000 lbs Typically the cost of potash is calculated as the cost it takes to create one tonne of potash COSTS INCLUDED Labour Materials Power and utilities Natural gas Freight Royalties and mineral rights Potash Production Tax Depreciation and amortization of things like equipment and buildings
In comparison to a Russian producer shipping overseas	Transportation Costs Canadian potash has to move to either coast to get to global markets It costs significantly more for Canadian producers to move potash to ports on the east coast or in the US than for global producers to ship potash into North America.
Canadian Potash Tax Treatment		CROWN ROYALTY TAX Crown Royalty tax is paid to the Crown for removing the mineral and selling it. Calculated as value of potash produced (average selling price) x 3% POTASH TAXES Base – producers estimate how much potash they will make in a year x 35% to a maximum and minimum; there are deductions available to incentivize new mine research and development along with market development to grow the industry – paid monthly Profit tax – producers estimate how much they will make in a year x 15% or 35% (based on amount sold in a year); there are deductions to encourage companies to build or expand mines, create corporate office positions, and do market/research development – paid quarterly Resource Surcharge tax – calculated as 3% of all third-party revenue sales of Canadian Potash. OTHER TAXES Potash base tax, potash profit tax, resource surcharge tax, provincial and federal income taxes, provincial and federal sales taxes, property taxes and carbon taxes (both direct and indirect).
Tax Burden It’s estimated that Russian potash companies pay 43% less as a percentage of operating earnings It’s important for regulators to consider the collective impact many changes in different places have on overall cost compared to the competition We know taxes and costs will increase and change over time — that’s a given The goal should be to maximize the earning potential of the industry so Canadian producers are selling their potash and making more profit, so everyone’s share grows exponentially
	Priced to Sell COMMODITY Potash is considered a commodity, meaning it is interchangeable with commodities of the same type and is used as an input to produce other goods – like crops that are used for food NEGOTIATIONS Potash companies around the world negotiate with buyers to set volumes and prices for potash, based on the current market conditions CONTRACTS Each growing cycle comes with contract negotiations with the largest world importers like China and India PRICING The price of potash is set by the market not the seller and is based on what a customer needs at that time with what’s most readily available
Price Factors	PRICE IS BASED PER TONNE Supply: how much is available Demand: how much is needed Growing season and weather Farmer disposable income Government subsidies Currency exchange rates Tariffs and trade wars	POTASSIUM CHLORIDE PRICES Vancouver F.O.B, standard, monthly, 2009 – 2023
Environmental Footprint More Canadian potash is better for the world We won’t compromise on many of the ‘higher costs’ we pay, such as: Paying well above minimum wage and offering good benefits Working to reduce environmental impact Hiring inclusively Investing back in our people, communities and business Attracting and keeping the best talent in Canada	Potash companies in Canada have made big, meaningful reductions and commitments to reduce their impact on the environment: * GHG = Greenhouse Gas
	TIME TO DIG DEEPER Get a better understanding of the basic business fundamentals of the potash industry. SHOW ME	WHY IT ALL MATTERS Potash plays a major role in our economy. The facts are compelling. Dig in. SHOW ME

DIG DEEPER INTO THE Business of Potash

Potash Basics

How it’s Mined & Processed

The Canadian Potash Industry

Current Potash Projects

Canada

Russia / Belarus / China

Global Players Outside Canada

Russia

Belarus

Israel

Chile

China

Laos*

Global Potash Production

Where Canadian Potash Goes

Journey of a Rail Car of Potash

Step 1

Step 2

Step 3

Step 4

Step 5

Step 1

Step 2

Step 3

Step 4

Step 5

The Cost to Produce Potash

Transportation Costs

Canadian Potash Tax Treatment

CROWN ROYALTY TAX

POTASH TAXES

OTHER TAXES

Tax Burden

Priced to Sell

COMMODITY

NEGOTIATIONS

CONTRACTS

PRICING

Price Factors

PRICE IS BASED PER TONNE

POTASSIUM CHLORIDE PRICES

Environmental Footprint

More Canadian potash is better for the world

TIME TO DIG DEEPER

WHY IT ALL MATTERS

DIG DEEPER INTO THE
Business of Potash