Sustainability Committee Letter

Throughout 2009, companies around the world were tested by a global economic downturn — and PotashCorp was no exception.

Sustainability, however, means having the capability to endure. It means recognizing the links between our financial, environmental and social performance and establishing systems that build a strong and lasting foundation for our company.

We believe that 2009 demonstrated the importance of a sustainable approach. In the face of the most significant deferral of fertilizer demand our industry has ever experienced, we remained successful, responsible and adaptable in ways that will make us a better company in the future.

Guided by our core values and proven long-term strategies, we achieved a number of notable successes. In 2009, we:

• Reduced our lost-time injury rate by 46 percent, achieving our lowest-ever rate and improving safety for our employees;
• Completed a project at our Patience Lake potash plant which increases our operational capability there to 500,000 tonnes and helps us to better meet the future needs of our customers;
• Spent $1.3 billion on capacity expansion and other potash projects, creating additional opportunities for business partners while strengthening our long-term leadership position in our industry;
• Trained more plant-site employees than in any of the past four years;
• Generated $988 million in net income, the third-highest total in our history despite extremely challenging market conditions;
• Approved, with the support of our Board of Directors, safety and environmental bonuses for plant-site employees under our Short-Term Incentive Program, although the company did not reach threshold economic targets which must normally be met before any bonus can be paid (this exception to the Short-Term Incentive Program was granted for 2009, reflecting our company-wide belief that safety of people and the environment is our No. 1 priority — even in the face of challenging market conditions).

As pleased as we are with our accomplishments, sustainability — and accountability — require us to critically assess our performance, especially in areas where we fell short of our annual targets and long-term goals. We have a target of achieving zero life-altering injuries at our sites, but in 2009 we experienced a fatality at our potash operation in New Brunswick — a tragic event that reinforces our resolve on matters related to safety. We responded by rigorously re-evaluating mine construction procedures and pre-job assessments focusing on awareness and training. We also failed to achieve our environmental target of reducing reportable releases, permit excursions and spills from 2008 levels. We have studied these events and are implementing both corrective and proactive measures.

As we look ahead to new targets and initiatives that improve our ability to deliver for all stakeholders, we continue to align our business priorities with our sustainability aspirations, recognizing that there is more work to do.

Our objectives for 2010, include:

• Appointing a full-time manager for our philanthropic initiatives to ensure we are supporting areas that are important to our stakeholders and allow us to have the greatest positive impact on the areas where we work and live;
• Creating a full-time position to support our community outreach and marketing activities so we remain connected to the grass roots of our operations;
• Developing waste and water reduction strategies to improve our environmental performance; and
• Developing a new product quality target to ensure customer satisfaction, which will be announced in 2011.

We are intently focused on building value for all our stakeholders — including customers, employees, host communities, shareholders and suppliers — and doing so in a way that does no harm to people or damage to the environment.

Our successes in 2009 are a testament to our sustainable business approach. Our plans for 2010 and beyond are designed to help us — and our stakeholders — address our short-comings and thrive in the years ahead.