Agrium announced that it has executed a long-term rock supply agreement with OCP to purchase phosphate rock to supply Redwater, Alberta phosphate facility. The phosphate rock from OCP will replace the phosphate rock currently supplied from mine at Kapuskasing, Ontario.
The move to utilizing rock from OCP is expected to take place in the second half of 2013 as economic rock reserves at Kapuskasing will be depleted at that time.
The agreement covers rock supply for a period up to 2020 at prices that are based on a formula that tracks finished product pricing and key published input costs. It offers downside protection to Agrium in periods of low phosphate prices and also affords OCP an opportunity to benefit from the upside when phosphate prices are strong.
