Site Reclamation and Remediation Obligations

After mining, PotashCorp restores and reclaims sites, incurring over $20 million in 2006. Over the last five years, annual expenses have averaged $18 million.

In some cases, a mine must close before remediation is possible. At the end of 2006, the company had accrued almost $101 million for the present value of asset reclamation and restoration costs at its potash and phosphate mining operations (primarily phosphate mining), including management of materials generated by mining and mineral processing, such as various mine tailings and gypsum; land reclamation and revegetation programs; decommissioning of underground and surface operating facilities; general clean-up activities aimed at returning the areas to an environmentally acceptable condition; and post-closure care and maintenance.

The company spent more than $1 million on remediation projects related to past spills and disposal practices. Some of these costs and liabilities were related to past waste disposal practices at sites previously owned by other companies. It is also engaged in site assessment and/or remediation activities at some facilities it no longer owns.

Certain of the company's facilities have asbestos-containing materials which it will be obligated to remove and dispose of in a special manner should the asbestos become friable (i.e. readily crumbled or powdered) or should the property be demolished. As a result of the longevity of many facilities where asbestos exists and the fact that it does not have plans for major changes that would require the removal of asbestos, the timing of the removal of asbestos is often indeterminable. Liabilities associated with these obligations will be recognized in the period in which sufficient information is available to reasonably estimate the fair value.