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29.11.2011 – 07:42

K+S Aktiengesellschaft

EANS-News: K+S Aktiengesellschaft
Expansion of potash capacities Green Light for Legacy Project in Canada

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
Company Information/K+S Aktiengesellschaft 

Subtitle: K+S Aktiengesellschaft / Expansion of potash capacities
Green Light for Legacy Project in Canada

Kassel (euro adhoc) - Kassel, Germany - November 29, 2011

Expansion of potash capacities
Green Light for Legacy Project in Canada

 • The Supervisory Board approved the plan of the Board of Executive
   Directors of total capital expenditure of CAD 3.25 billion (about EUR 2.4
 • Total capacity of 2.86 million tonnes of potassium chloride p.a. expected
   in 2023
 • Start of production and first volumes expected in 2015
 • Further expansion of production capacity to 4 million tonnes of potassium
   chloride p.a. possible in the long-term
 • The Legacy Project is one of the world´s economically most attractive
   potash greenfield projects

The Supervisory Board of K+S Aktiengesellschaft approved the plan of  the  Board
of Executive Directors to implement the Legacy Project in the Canadian  province
of Saskatchewan. For this purpose, capital expenditure  totalling  3.25  billion
Canadian dollars (CAD, equivalent to about EUR 2.4 billion) have been approved.

"The Legacy Project is a significant step towards the expansion  of  our  potash
capacities and enables us to participate in the  growth  of  the  global  potash
market.  Together  with  our  existing  potash  mines  in  Germany,  this   will
considerably  strengthen  the   international   competitiveness   of   K+S   and
consequently benefit the entire K+S Group in Europe and overseas," says  Norbert
Steiner, Chairman of the Board of Executive Directors of K+S. "Furthermore,  the
new site will have a  positive  impact  on  our  average  production  costs  and
increase our flexibility," Steiner continues.

Feasibility study revised and optimised
K+S had acquired the Canadian exploration and  development  company  Potash  One
(now K+S Potash Canada), at the beginning of 2011, and  has  been  revising  and
optimising the existing feasibility study over  recent  months.  A  concept  was
developed,  which  is  optimally  consistent  with  the  production  and  market
forecasts of K+S and demonstrates very positive viability.

Production start in 2015
Initial  infrastructure  construction  works  in  the  areas  of  water  supply,
electricity and road development as well as  drilling  activities  have  already
begun at the site. Through to 2015, K+S will develop a potash  production  based
on solution mining in southern Saskatchewan with first quantities  of  potassium
chloride. By 2017 the two million tonne mark shall  be  reached.  This  will  be
followed by the gradual expansion of production capacity to 2.86 million  tonnes
by 2023.

In a further expansion phase, total output of  4  million  tonnes  of  potassium
chloride annually would be achieved about ten years later.

Attractive potash deposit with high material content
The Legacy Project area is located about 50 km north of the city  of  Moose  Jaw
(Saskatchewan). The initial exploration area at the Legacy Project,  which  only
makes up a fraction of the total permitted area of K+S Potash  Canada  (formerly
Potash One), has proven reserves of 160 million tonnes of final potash  product.
Considering the target annual production, this results in a useful life of  more
than 55 years, including the ramp-up curve. At about 18%,  the  K2O  content  is
significantly higher than that of the German sites  and  will  therefore  enable
more efficient and more economic extraction. The remainder of  this  one  potash
lease  area  contains  additional  resources  of  almost  a  billion  tonnes  of
potassium chloride.

Strong economic attractiveness
The sharp ramp-up curve means that the project in 2016 already will probably  be
significantly positive in terms of  EBITDA  and  that  EBIT  practically  should
reach the profit threshold. In the coming years, parallel to the ramping  up  of
production capacity, substantial contributions to earnings can be expected.

"Our  Legacy  Project  is  one  of  the  world´s  economically  most  attractive
greenfield projects," says Joachim Felker, member  of  the  Board  of  Executive
Directors of K+S Aktiengesellschaft whose responsibilities  include  the  Potash
and Magnesium Products business segment. "The benefits of  the  project  include
the  already  existing  very  good  infrastructure,  the  significantly  earlier
availability of product that solution mining brings and,  not  least,  our  many
years of expertise as an established potash producer," continues Felker.

Expanding the global presence of K+S
The Legacy Project supplements the existing German  production  network  of  K+S
with  an  important  North  American  site.  This  makes   possible   a   unique
diversification of production among potash producers. In future,  the  new  site
will be the starting point primarily for sales to the  emerging  growth  markets
of Asia and South America as well as  in  North  America.  K+S  will  carry  out
distribution via its tried and tested infrastructure.

Financing of the project on a solid basis
With a level of indebtedness of under 25%, the K+S Group  enjoys  a  very  solid
balance sheet structure. The financing of the Legacy Project should be  able  to
be provided predominantly from liquidity and future cash flows. The  refinancing
of the bond maturing in 2014 is assumed in this.

K+S also intends to maintain its existing, essentially earnings-driven  dividend
policy with a payout ratio of 40 to 50% of adjusted Group earnings  after  taxes
and, moreover, strive to retain its "Investment Grade" rating.

Further expansion potential exists
In addition to the Legacy Project, over the coming years, K+S will also  explore
in more detail the other permit areas taken over from  Potash  One  in  southern
Saskatchewan. Due to the limited geological data, the deposits there cannot  yet
be divided into resources and reserves. However,  the  exploration  permits  are
located  in  areas  of  known  geologically  high-quality  potash  deposits   in
Saskatchewan and should for that reason constitute a future  potential  that  is
not to be underestimated. Therefore, a Legacy Project II or III cannot be  ruled
out in the future.

Advantages for the province of Saskatchewan
With Legacy, the first greenfield potash project in over  forty  years  will  be
implemented in Saskatchewan. At present, around 30 people are  employed  at  K+S
Potash Canada in Saskatoon. During  the  construction  phase,  more  than  1,000
people will be working on the site during peak times.  In  its  final  expansion
stage, the new  K+S  site  will  employ  more  than  300  people.  Additionally,
external contractors will support the brine plant and plant operations over  the
long term.

Assuming annual production of 2.86 million tonnes of KCl and  on  the  basis  of
current potash prices, the province  of  Saskatchewan  will  in  future  receive
considerable income in the form of taxes and royalties.

Experience growth
The K+S  Group  is  one  of  the  world's  leading  suppliers  of  standard  and
speciality fertilizers. In  the  salt  business,  K+S  is  the  world´s  leading
producer with sites in Europe as well as North and South America. K+S  offers  a
comprehensive range  of  goods  and  services  for  agriculture,  industry,  and
private consumers which provides growth opportunities in virtually every  sphere
of daily life. The K+S Group employs more than 14,000 people. The  K+S  share  -
the commodities stock on the German DAX index - is listed on  all  German  stock
exchanges (ISIN:  DE000KSAG888, symbol: SDF). Further information about K+S  can
be found at www.k-plus-s.com and information about the Legacy  Project  and  K+S
Potash Canada at www.ks-potashcanada.com.

Note to editors
We are offering a conference  call  with  members  of  the  Board  of  Executive
Directors  for  investors  and  analysts  in  English   today   at   2:30   p.m.
Shareholders, investors, representatives of the press and all  other  interested
parties  are  invited  to  follow  the  conference  via  a   live   webcast   at
(http://www.k-plus-s.com/kspcen) or by  phone  under  +49-(0)69-71044-5598.  The
presentation of the conference call can be found on our website. The  conference
will be recorded and will also be available as a podcast.

Your contact persons:

Michael Wudonig, CFA   

Phone:      +49 561 9301-1262     
Fax:  +49 561 9301-1666     

Investor Relations:

Christian Herrmann, CFA
Phone:     +49 561 9301-1460
Fax:  +49 561 9301-2425

Forward-looking statements
This press release contains  forward-looking  statements  that  are  subject  to
various risks and uncertainties. Such  statements  represent  management's  best
judgment as determined on the basis of all the information currently  available.
Statements in this press release other than  purely  historical  information  as
well as statements on  future  plans  and  objectives  or  on  expected  results
constitute forward-looking statements. Forward-looking statements are  based  on
numerous  assumptions  and  are  subject  to  all  business-related  risks   and
uncertainties. The companies assume no obligation to update the  forward-looking
statements contained herein.

Further inquiry note:
Michael Wudonig, CFA   
Phone:      +49 561 9301-1262     
Fax:  +49 561 9301-1666     

Investor Relations:
Christian Herrmann, CFA
Phone:     +49 561 9301-1460
Fax:  +49 561 9301-2425

end of announcement                               euro adhoc 

company:     K+S Aktiengesellschaft
             Bertha-von-Suttner-Straße  7
             D-34131 Kassel
phone:       +49 (0)561 9301-1460
FAX:         +49 (0)561 9301-2425
mail:     christian.herrmann@k-plus-s.com
WWW:      http://www.k-plus-s.com
sector:      Chemicals
ISIN:        DE000KSAG888
indexes:     DAX, Midcap Market Index, CDAX, Classic All Share, HDAX, Prime All
stockmarkets: official dealing/prime standard: Frankfurt, regulated dealing:
             Stuttgart, München, official dealing: Berlin, Hamburg, Hannover 
language:   English

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