REASONS FOR DECISION MINISTERIAL APPROVAL PURSUANT TO SECTION 15(1)(a) THE ENVIRONMENTAL ASSESSMENT ACT

POTASHCORP CORY POTASH MINE EXPANSION

Introduction

The Environmental Assessment Act (hereinafter called the Act) states that a person shall not proceed with a development (as defined in the Act), until Ministerial Approval has been received. It further sets requirements for a process of environmental impact assessment intended to inform the Minister of the potential impacts of a development prior to making a decision regarding the development.

In December 2008 PotashCorp submitted a project proposal declaring their intent to seek approval to expand production at their Cory potash mine (hereinafter called the Development).

Following review of the project proposal the expansion was declared a Development under Section 2(d) of the Act. The proponent (PotashCorp) subsequently submitted an Environmental Impact Statement which underwent both technical and 30-day public reviews.

I am therefore satisfied that the Proponent has met the requirements of the Act.

Background

The Cory mine is located in south central approximately 7 km west of the City of in the Rural Municipalities of Vanscoy No. 345 and Corman Park No. 344. The Cory mine went into production in 1968, several years prior to The Environmental Assessment Act coming into effect. Consequently, the existing mine does not operate under an approval pursuant to the Act. The currently proposed expansion will therefore receive a Ministerial Decision under Section 15 of the Act.

In 2007 PotashCorp proposed to increase production from 800,000 tonnes to 2 million tonnes per year. The proposal was screened and a “no development” opinion was given by the Environmental Assessment Branch to PotashCorp. Prior to fully completing the 2007 expansion, PotashCorp has now proposed to expand potash production from 2 to3 million tonnes/year and increase the number of people employed from 233 to 380. The expansion is being proposed to provide additional red product to meet the world-

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wide demand for fertilizer. To accommodate this increase the proposed expansion includes expansion of the flotation and compaction plants; upgrades for additional hoisting, mining and storage capacity; a 1.5 ha raw water storage reservoir; and a new brine disposal well. The footprint of the tailings management area (TMA) will not change.

Environmental Assessment

Public notice of the assessment was first given in April 2009 pursuant to Section 10 of the Act. The Proponent had submitted an earlier project proposal, but they did not wish to have Project Specific Guidelines (PSGs) to guide development of their environmental impact statement (EIS).

In seeking approval for the Cory expansion, PotashCorp, in accordance with the Act, conducted an environmental impact assessment (EIA). The Proponent prepared and submitted an EIS entitled, Environmental Impact Statement Proposed PotashCorp Cory Red Product Expansion, dated June 2009, to the Ministry for technical review. Additional information was requested and received in September 2009.

The EIS was reviewed technically by provincial ministries and agencies and subsequently made available, accompanied by the addendum and Technical Review Comments document compiled by the Environmental Assessment Branch, for public review from September 14, 2009 to October 15, 2009 pursuant to Section 12 of the Act.

Having made my decision to issue a Ministerial Approval, the Act requires me, pursuant to subsection 15(2), to state the reasons for the decision.

Reasons for Decision

The Statement submitted by the Proponent describes the Development and its potentially adverse impacts on the environment. In this regard, the main potential impacts from the project would be the potential contamination of adjacent soils and groundwater due to brine migration from the fine and coarse tailings areas, subsidence, and fresh water use.

To address brine migration from the tailings management area (TMA), the Proponent has committed to additional sampling, a complete assessment of the slurry wall, a review of options for dewatering the salt tailings pile, and to undertake any necessary remedial work to limit any brine migration.

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Based on the contaminant transport modeling submitted by the Proponent in the EIS and their commitment to implementing the brine migration strategies mentioned above, I am satisfied that brine migration will be adequately managed through the above measures and any terms and conditions attached to this approval.

As a result of the production expansion, Cory will be stockpiling more waste salt annually. Most of the existing salt pile would remain throughout and well past the life of the mine prolonging the risk of brine migration into the decommissioning and reclamation period. The potash industry has been studying alternatives to aboveground storage, but has concluded that safety and technological concerns still outweigh the benefits of alternative disposal methodologies. As ongoing research creates new solutions, the industry will be expected to consider alternatives to current approaches to tailings storage. When involved in this type of research, the Proponent is expected to make the results available to the public.

Subsidence (lowering of land surface elevation) is being monitored regularly at the Cory mine site at a network of surface benchmarks using conventional levelling methods. Monitoring using Light Distance and Ranging (LiDAR) is currently is being evaluated. A maximum subsidence of 0.6 m has been measured at some of the earlier mined sites. PotashCorp expects a maximum of approximately 1.07 m of subsidence over mined out areas over time. Modeling carried out by PotashCorp and presented in the current EIS indicates that only minor alterations to surface water flow regimes are expected. While local in extent, the effect of subsidence on the hydrology of various areas along the edge of the mine lease is identifiable. This concern is alleviated somewhat by the expectation that there will be less than one millimeter per horizontal metre of subsidence at the edge and the inclusion of subsidence analysis and assessment in the EIS. However, the analysis and assessment should be incorporated into the mine's existing water management plan and include measures to mitigate local subsidence problems if and as they arise. I am satisfied that the surface subsidence monitoring is adequate and that any impacts arising from the Proponent’s potash mining activities, including subsidence, can be addressed by the Proponent as generally directed under the terms and conditions stipulated in this approval. In particular, the Proponent is asked to develop a contingency plan for addressing any effects that may arise from mining induced subsidence.

The proposed expansion at the Cory mine will result in an increase in fresh water use of 51% over the approved 2007 level. Although PotashCorp does use a substantial quantity of wastewater from the ATCO/SaskPower plant, PotashCorp has not identified any additional strategies for reducing water use, at least on a per tonne basis. PotashCorp should continue to explore technologies for reducing fresh water consumption.

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Saskatchewan Ministry of Environment and review agencies are satisfied that, if the mitigative and environmental protection measures outlined in the EIS are implemented, and if appropriate conditions of approval are imposed, as presented in my approval, adverse effects can be minimized and benefits enhanced. This conclusion is based on the Proponent’s commitments as documented in the Statement; on the ability of the Minister of Environment to impose specific conditions at this time; and on the knowledge that additional environmental protection requirements can be imposed through terms and conditions forming part of permits and licences required by provincial legislation.

I have concluded that any adverse environmental effects associated with PotashCorp’s Cory Expansion can be eliminated or minimized. Approval under the Act, therefore, has been granted to the Proponent for the Development as described in the Statement.

The Ministerial Approval for the Development includes terms and conditions designed to promote the elimination and control of adverse environmental effects associated with the project. Included are requirements that the Proponent:

(a) proceed with the Development in accordance with the Statement;

(b) provide notification of any change; and

(c) follow the requirements of the Mineral Industry Environmental Protection Regulations and other laws.

These conditions, plus the measures proposed in the Statement and the regulatory framework applicable to the Development, now and in the future, are adequate to address all issues related to the Development.

Dated at Regina, Saskatchewan this 23rd day of October , 2009

Original signed by: Nancy Heppner Minister of Environment

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