Agrium (AGU) Announces Egyptian Parliament Will Not Support EAgrium Project on Current Site

June 20, 2008 9:35 AM EDT

Agrium Inc. (NYSE: AGU) today announced that the Egyptian Peoples Assembly has voted to recommend the relocation of the EAgrium facility to an unnamed location, and the Egyptian Prime Minister has indicated he will support the recommendation.

The Peoples Assembly ratified the Fact Finding Committee Report that EAgrium satisfied all of the requirements of Egyptian law in acquiring the necessary permits and approvals to construct the EAgrium project on land zoned for industrial projects, in partnership with the Egyptian Government. Agrium has previously stated, and remains of the opinion, that movement of the facility from the existing industrial-zoned site would require new financing, permitting and the negotiation of new engineering, procurement and construction contracts, and that it is not a viable option.

Agrium will be aggressively pursuing full recovery of its costs, equity contribution and future lost profits. The Egyptian Prime Minister has offered two possible options to resolve the matter:

1. a buyout of Agrium's investment in the project, and/or
   
2. the transfer to Agrium of an interest in an Egyptian government-owned nitrogen facility currently being commissioned adjacent to the EAgrium site.

Agrium will be evaluating all options and may have to write off the approximately $280 million invested in the project in Q208.

Agrium, Inc. produces and markets agricultural nutrients, industrial products, and specialty products worldwide, as well as involves in the retail supply of agricultural products and services in North and South America.

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