German potash miner K+S is prepared to invest as much as $2 billion with a partner in new mining projects, as the company seeks to tap resurgent global fertilizer demand.

"We are looking into a number of projects, making us confident that we will mobilize additional capacity," Chief Executive Norbert Steiner said in remarks to journalists.

The company is ready to expand its current potash output capacity of 7.5 million tons a year by some 2 million tons, Steiner said. Developing annual capacities of 1 million tons requires investments of roughly $1 billion, he added.

Lacking the financial clout to buy a larger rival, Steiner has for more than two years been looking for overseas partners to dig for potash, a key crop nutrient.

But a longtime frontrunner, Russian tycoon Andrei Melnichenko and his fertilizer group EuroChem, last month walked away from negotiations.

EuroChem said it was looking at various funding options, including an IPO, to develop the Verkhnekamsk potash deposits in the Ural mountain range on its own.
K+S CEO Steiner said he was looking for a partner in all regions of the world but declined to provide details.

He reiterated that the takeover of a rival potash producer was not an option: "That is beyond our reach."

The planned divestment of K+S's gardeners' supplies unit Compo, announced in June, was on track but a sale was not the only option, the CEO said.

"If certain expectations aren't met we will not let the process end with a divestment at all costs," Steiner cautioned. In a reversal of the diversification championed by his predecessor and now Chairman Ralf Bethke, Steiner had said he was looking to hive off Compo, with its palette of gardeners' fertilizers and potting soil.

K+S on Nov. 2 lifted its 2010 earnings outlook after a rebound in global agricultural-produce prices drove a recovery in the fertilizer industry.