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U.S. SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





Form 10-K


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31,
2001

Commission file number 1-10351





Potash Corporation of Saskatchewan
Inc.

(Exact name of the registrant as specified in
its charter)


|                                                                                   |  |                                                
|---------------------------------------------------------------------------------- |  | -----------------------------------------------
|Saskatchewan(State or other jurisdiction of
        incorporation or organization) |  | N/A(I.R.S. employer
        identification no.)

122  1st Avenue South

Saskatoon, Saskatchewan, Canada
S7K 7G3


306-933-8500


(Address and telephone number of the
registrants principal executive offices)


Securities registered pursuant to
Section 12(b) of the Act:

| |                             |  |                                      | 
| | --------------------------- |  | ------------------------------------ | 
| | Title of each class         |  | Name of exchange on which registered | 
| |                             |  |                                      | 
| | Common Shares, No Par Value |  | New York Stock Exchange              | 

The Common Shares are also listed on The Toronto
Stock Exchange in Canada

Securities registered pursuant to
Section 12(g) of the Act: none

Indicate
by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days.  Yes
x  No
o

Indicate
by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.  x

At
March 15, 2002, the registrant had 51,959,339 Common Shares
outstanding, and the aggregate market value of the 51,899,501
Common Shares held by non-affiliates of the registrant was
approximately $3,272,782,594.

DOCUMENTS INCORPORATED BY REFERENCE

Portions
of the registrants Annual Report to Shareholders for the
fiscal year ended December 31, 2001 (the 2001 Annual
Report), filed as Exhibit 13, are incorporated by
reference into Part II.

Portions
of the registrants Proxy Circular for its Annual and
Special Meeting of Shareholders to be held on May 9, 2002
(the 2002 Proxy Circular), attached as
Exhibit 99, are incorporated by reference into
Part III.



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PART I

ITEMS 1 and
2.     Business and
Properties.

General

Potash Corporation of Saskatchewan Inc.
(PCS) and its direct and indirect subsidiaries
(together with PCSs predecessors, the Company)
is one of the worlds largest integrated fertilizer and
related industrial and feed products companies with significant
market share in each of the three primary nutrient
products  potash, phosphate and nitrogen. The Company
is the largest potash producer worldwide by capacity. In 2001,
the Companys potash operations represented an estimated
15% of global production, 23% of global potash capacity and 59%
of global potash excess capacity. The Company is the third
largest producer of phosphates worldwide by capacity. In 2001,
its phosphate operations represented an estimated 5% of world
phosphoric acid production and 6% of world phosphoric acid
capacity. The Company is the second largest producer of nitrogen
products in the Western Hemisphere.

The Companys potash operations pull potash
from six mines in Saskatchewan, five of which it owns and
operates, and one mine in New Brunswick which it owns and
operates. The Company is also developing a potassium nitrate
production facility in Chile.

The Companys phosphate operations include
the manufacture and sale of solid and liquid phosphate
fertilizers, animal feed supplements and purified phosphoric
acid, which is used in food products and industrial processes.
The Company believes that its North Carolina plant is the
worlds largest vertically integrated phosphate mine and
processing plant. The Company also has a phosphate mine and two
chemical plant complexes in northern Florida, five phosphate
feed plants in the United States and one feed plant in Brazil.
In addition, the Company produces a variety of phosphate
products at its Geismar, Louisiana facility.

The Companys nitrogen operations involve
the production of nitrogen fertilizers and nitrogen chemicals,
including ammonia, urea, nitrogen solutions, ammonium nitrate
and nitric acid. The Company operates nitrogen facilities in
Georgia, Louisiana, Ohio, Tennessee and Trinidad.

Through Florida Favorite Fertilizer in Florida
and Farmers Favorite Fertilizer in Georgia and Alabama,
the Company manufactures, processes and distributes fertilizer
and other agricultural supplies from plants located in Florida,
Alabama and Georgia.

PCS is organized under the laws of the Province
of Saskatchewan, Canada. The principal executive offices are
located at 122  1st Avenue South,
Suite 500, Saskatoon, Saskatchewan, Canada S7K 7G3,
telephone: (306) 933-8500.

History

PCS is incorporated under the laws of the
Province of Saskatchewan and is the successor to a corporation
without share capital established by the Province of
Saskatchewan in 1975. Between 1976 and 1990, the Company
acquired substantial interests in the Saskatchewan potash
industry. It purchased the Cory mine in 1976, the Rocanville and
Lanigan mines in 1977, and, by 1990, 100% of the Allan mine when
the Company acquired all of the outstanding shares of Saskterra
Fertilizers Ltd. In addition, in 1978 the Company acquired
reserves at Esterhazy, which are mined by a third party.

In 1989, the Company was privatized by the
Province of Saskatchewan. While the Province initially retained
an ownership interest in the Company, this interest had been
reduced to zero by the end of 1993. In 1993, the Company
acquired from Rio Algom Limited (Rio) its New
Brunswick potash mine and port facilities and its Patience Lake
mine in Saskatchewan (the Rio Acquisition).

In April 1995, the Company purchased all of the
outstanding shares of Texasgulf Inc., a phosphate fertilizer and
feed producer, from Elf Aquitaine, Inc.
(Elf (USA)) and Williams Acquisition Holding
Company, Inc. (Williams). At the time of the
acquisition, the name Texasgulf Inc. was changed to
PCS Phosphate Company, Inc. (PCS Phosphate).

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In October 1995, the Company purchased all of the
outstanding shares of White Springs Agricultural Chemicals, Inc.
(White Springs), a phosphate fertilizer and feed
producer, from Occidental Chemical Corporation
(OxyChem).

In March 1997, the Company through its subsidiary
PCS Nitrogen, Inc. (PCS Nitrogen) acquired all of
the outstanding shares of Arcadian Corporation, a producer of
nitrogen fertilizer, industrial and feed products.

In March 1998, the Company acquired the potash
mill facility located at Clover Hill, New Brunswick. The
facility is operated as PCS Cassidy Lake.

In December 1998, the Company purchased, pursuant
to a public offering by the State of Israel, 108,359,925
Ordinary Shares of Israel Chemicals Ltd. (ICL) for
approximately $92 million. This purchase represents
approximately 9% of the issued and outstanding Ordinary Shares
of ICL. Through its subsidiaries, ICL is a potash, phosphate and
bromine producer and is also involved in other specialty
chemical products.

In July 1999, the Company purchased all of the
outstanding shares of Minera Yolanda SCM, a Chilean sodium
nitrate and potassium nitrate producer for approximately
$37 million. At the time of the acquisition, the name was
changed to PCS Yumbes SCM (PCS Yumbes).

In February 2000, the Company sold its shares in
Moab Salt, Inc. (Moab Salt) to Intrepid
Oil & Gas, LLC. The primary asset of Moab Salt is a
solution potash and salt mine in Moab, Utah.

In March 2000, the Company completed the purchase
of an animal feed plant in Brazil from Mitsui Company. The plant
is capable of producing 70,000 tonnes per annum of animal-feed
phosphate.

In March 2000, the Company completed a
transaction with Rhodia Inc. (Rhodia) to acquire the
remaining 50% ownership interest in a phosphoric acid joint
venture company formerly called Albright & Wilson
Company for approximately $42 million. Upon closing of the
transaction, the partnership was renamed PCS Purified
Phosphates. The Company and Albright & Wilson Americas
Inc. had been operating the business as a 50/50 partnership.
Upon completion of the transaction, the Company became the owner
of 100% of the purified acid plant and blending plant in Aurora,
North Carolina and 100% of the blending plant in Cincinnati,
Ohio. Rhodia retained a polyphosphoric acid production unit in
Charleston, South Carolina.

Recent Transactions

On October 24, 2001, the Company purchased,
pursuant to a public auction, approximately 48 million
Class A shares of Sociedad Química y Minera de
Chile S.A. (SQM), a Chilean company, for an
aggregate purchase price of approximately 91.5 billion
Chilean pesos (approximately US $129 million). The
purchase represented approximately 34% of the issued and
outstanding Class A shares of SQM and approximately 18% of
the total issued and outstanding equity (Class A and
Class B) of SQM. SQM is a world leader in specialty
fertilizer, iodine and lithium businesses.

On March 1, 2002, the Company purchased a 180,000
ton (US short ton capacity) animal feed plant in Joplin,
Missouri from Farmland Industries, Inc. together with a related
animal feed distribution business from Land OLakes
Farmland Feeds, LLC.

Presentation of Financial
Information

The Company has three principal business
segments: potash, phosphate and nitrogen. For information with
respect to the net sales operating income and assets
attributable to each segment and to the Companys domestic
and international sales, see Note 16 to the Companys
audited consolidated financial statements as at
December 31, 2001 and 2000 and for each of the three years
ended December 31, 2001 (together with the Notes thereto,
the Consolidated Financial Statements), incorporated
by reference under Item 8.

The Company presents its financial statements in
accordance with accounting principles generally accepted in
Canada (Canadian GAAP). See Note 30 to the
Consolidated Financial Statements for a discussion of certain
significant differences between Canadian GAAP and accounting
principles generally accepted in the United States as they
relate to the Company.

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Unless otherwise specified, dollar amounts are
stated in U.S. dollars.

Forward-Looking Statements

This document, including the documents
incorporated by reference, contain forward-looking
statements that relate to future events or the
Companys future financial performance. Statements
containing words such as could, expect,
may, anticipate, believe,
intend, estimate, plan and
similar expressions constitute forward-looking statements. The
Company disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of
new information, future events or otherwise.

Forward-looking statements are subject to
important risks, uncertainties and assumptions that are
difficult to predict. The results or events predicted in
forward-looking statements may differ materially from actual
results or events. Some of the factors that could cause actual
results or events to differ from current expectations include
the following:



| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | fluctuations in supply and demand for fertilizer,
	including fluctuations as a result of economic or political
	conditions in the Companys markets, which can cause
	volatility in the prices of the Companys fertilizer
	products;                         
|
| |  | changes in competitive pressures, including
	pricing pressure;                                                                                                                                                                                                
|
| |  | unexpected or adverse weather conditions, which
	can impact demand for fertilizer and timing of fertilizer sales
	during the year;                                                                                                                            
|
| |  | volatility in the price of natural gas, which is
	the primary raw material used for the Companys nitrogen
	products, and risks associated with the Companys continued
	ability to manage natural gas costs in the United States through
	hedging activities;
|
| |  | fluctuations in the prices of other raw
	materials, including sulfur, which is a primary input in the
	Companys phosphate operations;                                                                                                                        
|
| |  | unexpected mining conditions, which could change
	the Companys costs of production for potash and phosphates
	or cause changes in reserve estimates;                                                                                                         
|
| |  | changes in capital markets and in currency and
	exchange rates;                                                                                                                                                                                               
|
| |  | the outcome of legal proceedings;                                                                                                                                                                                                                             
|
| |  | changes in government regulations, including
	environmental regulations, which could increase the
	Companys costs of compliance and otherwise affect the
	business; and                                                                                      
|
| |  | acquisitions the Company may undertake in the
	future.                                                                                                                                                                                                        

The Company sells to a diverse group of customers
both by geography and by end product. Market conditions will
vary on a year-over-year basis, and sales can be expected to
shift from one period to another.

As a result of these and other factors, there is
no assurance that any of the events, circumstances or results
anticipated by forward-looking statements included or
incorporated by reference into this document will occur or, if
they do, of what impact they will have on the Companys
business or on results of operations and financial condition.

Potash Operations

The Companys potash operations include the
mining and production of potash, which is predominantly used as
fertilizer.

Properties

The Company controls the right to mine
615,400 acres of land in Saskatchewan. Included in these
holdings are mineral rights to 507,000 acres contained in
blocks around the six mines in which the Company has an
interest, of which acres approximately 36% are owned by the
Company, approximately 50% are under lease from the Province of
Saskatchewan and approximately 14% are leased from other
parties. The majority

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of the leases are for 21-year terms, renewable at
the Companys option. The Companys remaining
108,400 acres are located elsewhere in Saskatchewan.


Potash is mined by the Company from two main
potash bearing formations in Saskatchewan: the Patience Lake
member of the prairie evaporites in the north and the Esterhazy
member of the prairie evaporites in the south. The Patience Lake
member is mined at the Lanigan, Allan, Patience Lake and Cory
mines, and the Esterhazy member is mined at the Rocanville and
Esterhazy mines.

Under a long-term mining and processing agreement
(the Mining and Processing Agreement) effective
through December 31, 2026, IMC Esterhazy Canada
Limited Partnership (IMC) mines and processes PCS
reserves at the Esterhazy mine. PCS has the option to terminate
this agreement every five years. The next opportunity to
terminate is December 31, 2006, for which notice must be
given no later than June 30, 2006. IMC has the option to
abandon the mine at any time after December 31, 2011, thus
terminating the Mining and Processing Agreement. In each year
the maximum finished product the Company is permitted to take
under the Mining and Processing Agreement is 952,500 tonnes
and the minimum required amount is 453,600 tonnes. For the year
ending December 31, 2002, the Company has notified IMC that
it requires 952,500 tonnes of finished product. Water
inflow at the Esterhazy mine has continued, to a greater or
lesser degree, since December 1985. Substantial pumping capacity
has been installed and remedial efforts have been undertaken.
The Company shares, on an annual basis, in such water inflow
remediation costs.

Potash is also produced by the Company at its
mine near Sussex, New Brunswick from the flank of an elongated
salt structure. Granular product is also produced by the Company
at its Cassidy Lake, New Brunswick facility (Cassidy
Lake Facility) using standard grade product from certain
of the Companys other mine sites. The Company also holds
an interest in certain oil and gas rights within the vicinity of
the New Brunswick mine. Natural gas has been discovered and
the Company, in conjunction with Corridor Resources Inc., is
continuing investigations with a view to determining the extent,
nature and commercial viability of the gas discovery. The
Company expects to be able to use gas produced from the
discovery in its processing facility at the New Brunswick
mine.

PCS Yumbes, acquired in 1999, holds mining
concessions on certain sodium nitrate reserves in the Atacama
desert in northern Chile. The production facility is in the
development stage and has been designed to produce
0.285 million tonnes of potassium nitrate,
0.060 million tonnes of sodium nitrate and 360 tonnes of
iodine per year at full production. Preliminary production began
in mid-2000. Development continues with a view to bringing the
capability of the plant to its design capacity in the first half
of 2002. Sodium nitrate is combined with potassium chloride to
produce potassium nitrate, primarily used for intensely
cultivated and chloride-sensitive crops.

Production

The Company produces potash using both
conventional and solution mining methods. In conventional
operations, shafts are sunk to the ore body and mining machines
cut out the ore, which is lifted to the surface for processing.
In solution mining, the potash is dissolved in a warm brine and
pumped to the surface for processing. Approximately
20 grades of potash are produced to suit preferences of the
various markets.

In 2001, the Companys conventional potash
operations mined 18.8 million tonnes of ore at an average
grade of 22.9% potassium oxide (K2O). In 2001, the
Companys potash production consisted of 6.13 million
tonnes of potash (KCl) with an average grade of 61.07%
K2O, representing approximately 42% of North American
production.

The Companys present annual potash
production capacity is approximately 12.1 million tonnes
KCl, which includes maximum annual production under the Mining
and Processing Agreement with IMC of 952,500 tonnes at
Esterhazy. In 2001, the Companys production capacity
represented an estimated 55% of the North American total while
its excess capacity was an estimated 79% of North American
excess production capacity. The Company allocates production
among its mines on the basis of various factors, including the
grades of product which can be produced and cost efficiency. The
Patience Lake mine, which was originally a

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conventional underground mine, now employs a
solution mining method, while the other Saskatchewan mines which
the Company owns or in which it has an interest employ
conventional underground mining methods.


The New Brunswick mine is a conventional cut and
fill mine. In addition to potash production, this mine also
produced .60 million tonnes of sodium chloride
(salt) in 2001. The Company continues to incur costs at the
New Brunswick division in relation to locating and managing
a saturated brine inflow.

As part of the Rio Acquisition, the Company
granted a royalty interest to Rio based upon production and
revenue from the New Brunswick and Patience Lake potash mines
and mills (the Royalty). The terms of the Royalty
provide that if production meets specified base production
levels or the sales of potash are at prices which meet specified
base sales prices, a royalty per tonne is to be paid, calculated
on a formula basis. Payments under the Royalty are limited to a
term expiring October 7, 2003 and to a maximum aggregate
payment of Cdn$50 million. No payments have been made in
respect of the Royalty to date.

Reserves

The Company estimates that its conventional mines
in Saskatchewan contained 4.72 billion tonnes of
recoverable ore at an average grade of 22.9% K2O as
at December 31, 2001, and that such ore will yield
1.5 billion tonnes of finished product (KCl) at an average
grade of 60% K2O.

The Companys ore reserve estimates for its
conventional mining operations in Saskatchewan are based on
exploration drill hole data, seismic data and actual mining
results during the past 25 years. The Companys
estimated recoverable ore and the estimated volumes of finished
product from such ore as of December 31, 2001 are
as follows:

|           |       |                      |         |           |  |  |       |         | 
|---------- | ----- | -------------------- | ------- | --------- |  |  | ----- | ------- | 
|           |       | Estimated            |         | Estimated
|           |       | Recoverable          |         | Finished 
|Mine       |       | Ore                  |         | Product  
|           |       |                      |         |          
|           |       |                     
|           |       | (millions of tonnes)
|Allan      |       |                      | 1,385.6 |           |  |  | 508.0 |        
|Cory       |       |                      | 1,045.2 |           |  |  | 322.8 |        
|Esterhazy  |       |                      | 72.2    |           |  |  | 23.9  |        
|Lanigan    |       |                      | 1,543.8 |           |  |  | 443.7 |        
|Rocanville |       |                      | 672.0   |           |  |  | 222.1 |        
|           |       |                      |         |           |  |  |       |        
|           | Total |                      |         | 4,718.8   |  |  |       | 1,520.5 | 
|           |       |                      |         |           |  |  |       |        

The Company believes that, with production rates
at full capacity and utilizing current technology, each of the
Allan, Cory and Lanigan mines has a reserve life in excess of
100 years, the Rocanville mine has a reserve life in excess
of 90 years, and that the Esterhazy mine has a reserve life
of at least 20 years.

Given the characteristics of the solution mining
method employed at the Patience Lake mine, it is not possible to
estimate definitively the productive capacity of or the
recoverable ore from this operation. However, based on
information obtained upon the acquisition of the mine, current
technology and the present mining area for this operation, the
Company believes that the mine has a reserve life of at least
40 years for the existing mine workings. Different
techniques will have to be utilized to mine reserves outside of
the existing mine workings.

Based on geophysics, exploration drill hole data,
definition drilling underground and actual mining results, the
Company estimates proven reserves of 43.7 million tonnes of
recoverable ore and 15.1 million tonnes of estimated
finished product (KCl) at its New Brunswick mine. The Company
believes that, based upon its proven reserves, the New Brunswick
mine has a reserve life of approximately 20 years with
production at full capacity. The Company estimates that probable
reserves at the New Brunswick mine consist of 200 million
tonnes of recoverable ore and 69 million tonnes of
estimated finished product (KCl). The Company believes that,
based upon its proven and probable reserves, the New Brunswick
mine has a reserve life in excess of 100 years at full
production capacity and utilizing current technology.

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Phosphate Operations

The Company mines phosphate ore and manufactures
solid and liquid fertilizers, animal feed supplements and
purified phosphoric acid which is used in food products and
industrial processes.

Properties

The Company conducts its phosphate operations
primarily at two facilities, one a 35,000-acre facility near
Aurora, North Carolina and the other a 96,000-acre facility near
White Springs in northern Florida. The Company believes the
Aurora facility to be the largest integrated phosphate mine and
phosphate processing complex at one site in the world. The
Aurora facility, having an annual
P2O5 capacity of 1.2 million
tonnes, includes a six million tonne per-year mining operation,
four sulfuric acid plants, four phosphoric acid plants, a
purified acid plant, a liquid fertilizer (11-37-0) plant, a
superphosphoric acid plant, two diammonium phosphate
(DAP) plants and a solid fertilizer plant capable of
producing DAP, granular triple superphosphate (GTSP)
or monoammonium phosphate (MAP). Engineering and
offsite modular construction for an expansion of the
Companys purified P2O5 production
plant at Aurora is underway and the total project is scheduled
for completion by the first quarter of 2003. The expansion will
increase capacity by 83,000 tonnes to 251,000 tonnes
P2O5. The Company is also building a new
159,000 tonne DFP animal feed plant at Aurora, scheduled
for an August 2002 startup.

The White Springs facility is the third largest
P2O5 producer, by capacity, in the United
States, with an annual capacity of 1.1 million tonnes. The
White Springs facility includes a mine and two production
facilities, Suwannee River and Swift Creek, with two sulfuric
acid plants, three phosphoric acid plants, two DAP plants, a
superphosphoric acid plant, a dicalcium phosphate plant and a
defluorinated phosphate rock plant located at the Suwannee River
complex and two sulfuric acid plants and a phosphoric acid plant
and superphosphoric plant located at the Swift Creek
complex. At its Geismar, Louisiana facility, the Company
manufactures a variety of phosphate products that are used for
agricultural and industrial purposes. The Geismar facility has a
sulfuric acid plant, a phosphoric acid plant, a superphosphoric
acid plant, and a liquid fertilizer (11-37-0) plant. A
significant portion of the phosphoric acid produced at the
Geismar facility is sold as feedstock to Rhodia for use in its
neighboring purified acid plant. The Companys other
phosphate properties include animal feed plants in Kinston,
North Carolina; Marseilles, Illinois; Weeping Water, Nebraska;
Joplin, Missouri and Sao Vincente, Brazil; a purified
phosphate plant in Cincinnati, Ohio and terminal facilities at
Morehead City, North Carolina and Savannah, Georgia.

During 2001, the Company permanently closed its
Davenport, Iowa feed plant. Davenport had an annual capacity of
280,000 tonnes of Monocal and Dical feed supplements. The
Company also suspended all DAP production at the White Springs
facility for an extended period. Combined with previous
cutbacks, the total idled DAP production at the
White Springs facility is 710,000 tonnes on an
annualized basis. During the curtailment, the site will produce
P2O5 only to serve its feed business,
utilizing approximately 50% of its
P2O5 capacity.

Production

The Company extracts phosphate ore using surface
mining techniques. At each mine site, the ore is mixed with
recycled water to form a slurry, which is pumped from the mine
site to the Companys processing facilities. The ore is
then screened to remove coarse materials, washed to remove clay
and floated to remove sand to produce phosphate
rock. The annual production capacity of the
Companys mines is currently 9.6 million tonnes of
phosphate rock. During 2001, the Aurora facilitys total
production of phosphate rock was 3.9 million tonnes and the
White Springs facilitys total production of phosphate rock
was 1.7 million tonnes. The sequence for mining portions of
the Aurora property has been identified in the permit issued by
the U.S. Army Corps of Engineers in 1997. The Company has
been mining in an area of non-optimal mining conditions. The
quality and condition of the ore has been relatively inferior to
ore previously mined at the Aurora facility. This, combined with
the general configuration of the area, has not allowed for more
efficient use of the Companys mining equipment and
technology. In 2001, the Company moved about one-half of the
mining operation into an area believed to hold ore superior in
thickness and quality, located closer to the Companys
chemical plants, and configured so as to generally allow more
efficient use of Company mining

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equipment and technology. Movement of the entire
mining operations into this area should be completed in
late 2002.


Phosphate rock is the major input in the
Companys phosphorus processing operations. Substantially
all of the phosphate rock produced by the Company is used
internally for the production of phosphoric acid,
superphosphoric acid (SPA), chemical fertilizers,
purified phosphoric acid and animal feed products. The Geismar
facility is not located near a mine. Presently the Geismar
facility purchases phosphate rock from Morocco pursuant to a
long-term agreement with a Moroccan government-owned company,
wherein prices are reset at prescribed dates through negotiation.

In addition to phosphate ore, the principal raw
materials required by the Company are sulfur, sulfuric acid and
ammonia. The production of phosphoric acid requires substantial
quantities of sulfur, which the Company purchases from third
parties. In December 1997, the Company entered into a ten-year
supply contract with an offshore supplier to supply a portion of
the Companys sulfur requirements. In connection therewith,
the Company built a multipurpose ocean-going vessel to ship such
sulfur and to handle sulfuric acid, phosphoric acid and other
chemicals. The Company produces sulfuric acid at the Aurora
facility, White Springs facility and Geismar facility and
purchases additional sulfuric acid from unaffiliated sellers.
The Company also transports surplus production of sulfuric acid
at the White Springs facility to the Aurora facility
as needed.

The Companys phosphate operations purchase
all of its ammonia from or through PCS Nitrogen and PCS Sales
(USA), Inc., which are wholly owned subsidiaries of the Company.
The Company reacts phosphoric acid with ammonia to produce DAP
and MAP as well as liquid fertilizers. In addition, ammonia
operations include the purchase, sale and terminalling of
anhydrous ammonia. Most of the ammonia that is currently
purchased by PCS Nitrogen is produced in Russia and imported
through a Company operated ammonia terminal located within the
port of Savannah (Garden City, Georgia).

The Company produces merchant grade phosphoric
acid (MGA) at Aurora, White Springs, and Geismar. Some MGA
is sold to foreign and domestic fertilizer products and
industrial customers. The balance of the MGA is further
processed by the Company to make solid fertilizer (primarily
DAP), liquid fertilizers, animal feed supplements for the
poultry and livestock markets, and purified phosphoric acid for
use in a wide variety of feed and industrial applications.

Reserves

At December 31, 2001, the Companys
Aurora phosphate mine had estimated proven and probable reserves
of approximately 374 million tonnes of phosphate rock, at
an average grade of 30.7% P2O5. These
reserves would permit mining to continue at current rates for
about 75 years. The Aurora phosphate mine has an estimated
annual capacity of 6.0 million tonnes of phosphate rock and
its processing plants have the capacity to produce
1.202 million P2O5 tonnes of
phosphoric acid. Prior to the acquisition of Texasgulf by the
Company in April 1995, approximately 408 million tonnes of
phosphate reserves were transferred by Texasgulf to a newly
established company, the common stock of which was transferred
to Elf (USA) and Williams. The Company was granted a
20-year right of first refusal (from April 10, 1995) in the
event that the newly established company proposes to sell the
reserves. In addition, the newly established company and Elf
(USA) and Williams agreed, for a period of ten years from
April 10, 1995, not to compete, and for the first five
years not to make certain preparations to compete, with the
Company with respect to those reserves.

The White Springs phosphate mine had estimated
proven and probable reserves of approximately 54 million
tonnes of phosphate rock, at an average grade of 30.7%
P2O5. The Company estimates that an
additional 6 million tonnes of phosphate rock could be
purchased at market rates from nearby owners. Accordingly, the
total reserves and available purchase rock of 60 million
tonnes of phosphate rock at White Springs would sustain the mine
for 17 years at a mining rate of 3.6 million tonnes
per year. The White Springs mine has an estimated annual
capacity of 3.6 million tonnes of phosphate rock and the
processing plants have the capacity to produce annually
1.093 million P2O5 tonnes of
phosphoric acid.

I-7



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##### 



Nitrogen Operations

The Companys nitrogen operations include
production of nitrogen fertilizers and nitrogen chemicals. These
products are used for agricultural, industrial and animal
nutrition purposes.

Properties

PCS Nitrogen manufactures nitrogen products at
five facilities, of which four are located in the United States
and one is located in Trinidad. The following table sets forth
the facility locations and production capabilities:

|                      |  |                                                                     
|--------------------- |  | --------------------------------------------------------------------
|Plant Locations       |  | Nitrogen Products Produced                                          
|                      |  |                                                                     
|Augusta, Georgia      |  | Ammonia, urea, nitric acid, ammonium nitrate and
	nitrogen solutions
|Geismar, Louisiana    |  | Ammonia, nitric acid, nitrogen solutions                            
|Lima, Ohio            |  | Ammonia, urea, nitric acid and
	nitrogen solutions                  
|Memphis, Tennessee    |  | Ammonia and urea                                                    
|Point Lisas, Trinidad |  | Ammonia and urea                                                    

Production

Unlike potash and phosphate, nitrogen is not
mined. It is taken from the air and reacted with a hydrogen
source, usually natural gas reformed with steam, to produce
ammonia. PCS Nitrogen produces ammonia at all domestic plants
and in Trinidad. The ammonia is used to produce a full line of
upgraded nitrogen products, including urea, nitrogen solutions,
ammonium nitrate and nitric acid. Ammonia, urea, ammonium
nitrate and nitrogen solutions are sold as fertilizers to
agricultural customers and to industrial customers for various
applications, while nitric acid is sold to industrial customers
as an intermediate chemical feedstock. Urea is also sold for
animal feed applications.

Service Agreements

The Geismar plant is integrated with a larger
chemical manufacturing complex owned by Honeywell International,
Inc. (Honeywell). PCS Nitrogen and Honeywell have an
agreement to provide certain support services to each other,
including the provision of utilities, the discharge of
wastewater, security, dock and emergency services, and other
essential services.

BP Chemicals, Inc. (BPC) operates the
Lima plant on PCS Nitrogens behalf under an operating
agreement that can be terminated by either party with nine
months notice. PCS Nitrogens payments to BPC under
the operating agreement are generally based on an agreed annual
budget and are made through the reimbursement of expenses
incurred by BPC in providing such operating services. Such
expenses do not include natural gas procurement or
transportation costs. In addition, due to the mutual
interdependence of the Lima plant and BPCs operations, PCS
Nitrogen and BPC have agreed to provide each other with certain
manufacturing support services at cost pursuant to a contract
extending for as long as the plants continue to operate and
either party is required to provide support services thereunder.

At Augusta, PCS Nitrogen uses contract labor
personnel provided by Augusta Services Company, Inc., which is
owned 50% by PCS Nitrogen and 50% by DSM Chemicals
North America, Inc., to provide purchasing, stores and spare
parts management, maintenance, repair, shipping and certain
other services for the Augusta plant.

Despite the Companys belief that most of
the services described above are available from other sources,
the termination of or the need to replace certain of those
services (such as steam, well water supply and dock services)
could, in the aggregate, involve potentially significant capital
expenditures, increased operating costs and disruption to the
operation of the affected plant.

I-8



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##### 



Raw Materials

Natural gas is the primary raw material used for
the production of ammonia and, as a result, virtually all of
PCS Nitrogens other nitrogen products. For 2001, the
purchase and transportation of natural gas accounted for
approximately 58% of PCS Nitrogens total domestic
production cost. PCS Nitrogens domestic gas requirements
comprise approximately 50% of its total gas requirements. PCS
Nitrogens current natural gas strategy is to purchase
approximately one-half of its domestic natural gas in the spot
market or on short-term contracts and approximately one-half of
its domestic natural gas pursuant to fixed-price physical
contracts or forward contracts which fix the price of future
deliveries. The remaining approximately 50% of its natural gas
is purchased in Trinidad using pricing formulas related to the
market price of ammonia. With the exception of the Trinidad
facility, PCS Nitrogen purchases most of its natural gas from
producers or marketers at the point of delivery of the natural
gas into the pipeline system, then pays the pipeline company
and, where applicable, the local distribution company to
transport the natural gas to PCS Nitrogens facilities.
Approximately 75% of PCS Nitrogens domestic consumption of
natural gas is delivered pursuant to firm transportation
contracts which do not permit the pipeline or local distribution
company to interrupt service to, or divert natural gas from,
the plant.

PCS Joint Venture

The Company indirectly holds all outstanding
interests in a limited partnership (the PCS Joint
Venture) doing business in Florida as Florida Favorite
Fertilizer and in Georgia and Alabama as Farmers Favorite
Fertilizer. Potash Corporation of Saskatchewan (Florida), Inc.
is the general partner of PCS Joint Venture. PCS Joint Venture
manufactures, processes and distributes fertilizer and other
agricultural supplies from plants located in Florida, Alabama
and Georgia.

Marketing

The following table summarizes the Companys
net sales from potash, phosphate and nitrogen products (by
geographical distribution) in the past three calendar years:

|           |               |                       |   |       |  |      |   |       |  |  |   |       | 
|---------- | ------------- | --------------------- | - | ----- |  | ---- | - | ----- |  |  | - | ----- | 
|           |               | 2001                  |   | 2000  |  | 1999
|           |               |                       |   |       |  |     
|           |               |                      
|           |               | (millions of dollars)
|Potash(1)  |               |                       |   |       |  |      |   |       |  |  |   |      
|           | Canada        |                       | $ | 24.0  |  |      | $ | 28.0  |  |  | $ | 21.4  | 
|           | United States |                       |   | 208.2 |  |      |   | 209.4 |  |  |   | 216.0 | 
|           | Canpotex(2)   |                       |   | 237.6 |  |      |   | 268.9 |  |  |   | 254.7 | 
|           | Other         |                       |   | 55.7  |  |      |   | 72.4  |  |  |   | 71.2  | 
|           |               |                       |   |       |  |      |   |       |  |  |   |      
|           | Total         |                       | $ | 525.5 |  |      | $ | 578.7 |  |  | $ | 563.3 | 
|           |               |                       |   |       |  |      |   |       |  |  |   |      
|Phosphates |               |                       |   |       |  |      |   |       |  |  |   |      
|           | Canada        |                       | $ | 60.5  |  |      | $ | 51.4  |  |  | $ | 24.0  | 
|           | United States |                       |   | 478.2 |  |      |   | 536.5 |  |  |   | 594.2 | 
|           | PhosChem(2)   |                       |   | 65.3  |  |      |   | 146.3 |  |  |   | 186.5 | 
|           | Other         |                       |   | 47.8  |  |      |   | 48.3  |  |  |   | 39.1  | 
|           |               |                       |   |       |  |      |   |       |  |  |   |      
|           | Total         |                       | $ | 651.8 |  |      | $ | 782.5 |  |  | $ | 843.8 | 
|           |               |                       |   |       |  |      |   |       |  |  |   |      
|Nitrogen   |               |                       |   |       |  |      |   |       |  |  |   |      
|           | Canada        |                       | $ | 2.3   |  |      | $ | 1.4   |  |  | $ | 5.3   | 
|           | United States |                       |   | 595.9 |  |      |   | 658.7 |  |  |   | 480.2 | 
|           | Other         |                       |   | 297.2 |  |      |   | 210.3 |  |  |   | 168.5 | 
|           |               |                       |   |       |  |      |   |       |  |  |   |      
|           | Total         |                       | $ | 895.4 |  |      | $ | 870.4 |  |  | $ | 654.0 | 
|           |               |                       |   |       |  |      |   |       |  |  |   |      






|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(1) | Does not include PCS Yumbes which is
	presently accounted for on a pre-production basis.
|   
|(2) | See discussion below for information regarding
	sales of Canpotex Limited and PhosChem. 

I-9



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##### 



The following table summarizes the Companys
net sales from potash, phosphate and nitrogen products, by
category of product, in the past three calendar years:

|           |                      |                       |       |       |  |      |       |       |  |   |       |       | 
|---------- | -------------------- | --------------------- | ----- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|           |                      | 2001                  |       | 2000  |  | 1999
|           |                      |                       |       |       |  |     
|           |                      |                      
|           |                      | (millions of dollars)
|Potash(1)  |                      | $                     | 525.5 |       |  | $    | 578.7 |       |  | $ | 563.3 |      
|Phosphates |                      |                       |       |       |  |      |       |       |  |   |       |      
|           | Fertilizer  Liquids |                       |       | 145.0 |  |      |       | 192.3 |  |   |       | 215.5 | 
|           | Fertilizer  DAP/MAP |                       |       | 130.1 |  |      |       | 222.9 |  |   |       | 278.4 | 
|           | Feed                 |                       |       | 208.6 |  |      |       | 215.4 |  |   |       | 216.8 | 
|           | Industrial           |                       |       | 168.1 |  |      |       | 151.9 |  |   |       | 133.1 | 
|Nitrogen   |                      |                       |       |       |  |      |       |       |  |   |       |      
|           | Ammonia              |                       |       | 392.3 |  |      |       | 353.3 |  |   |       | 244.7 | 
|           | Urea                 |                       |       | 217.7 |  |      |       | 236.3 |  |   |       | 180.5 | 
|           | Nitrogen Solutions   |                       |       | 126.8 |  |      |       | 135.7 |  |   |       | 111.1 | 
|           | Other(2)             |                       |       | 158.6 |  |      |       | 145.1 |  |   |       | 117.7 | 






|    |                                                                                         
|--- | ----------------------------------------------------------------------------------------
|(1) | Does not include PCS Yumbes which is
	presently accounted for on a pre-production basis.
|   
|(2) | Other includes ammonium nitrate, nitric acid and
	carbon dioxide.                       

For further financial information about the
Companys business segments and domestic and international
sales, see Note 16 to the Consolidated Financial Statements.

The Company has a diversified customer base, and
apart from sales to Canpotex Limited (Canpotex), no
one customer accounted for more than 10% of the Companys
sales in 2001.

Potash from the Companys Saskatchewan mines
produced for use outside North America is sold exclusively to
Canpotex. PCS Sales (Canada) Inc. executes offshore
marketing and sales for the Companys New Brunswick potash
and executes marketing and sales for the Companys potash,
phosphate and nitrogen products in Canada. PCS Sales (USA),
Inc. executes marketing and sales for the Companys potash,
phosphate and nitrogen products in the United States.
PCS Sales (USA), Inc. also generally executes international
marketing and sales of the Companys potassium and sodium
nitrate products. PhosChem, an association formed under the
U.S. Webb-Pomerene Act, is the principal vehicle through
which the Company executes offshore marketing and sales for its
phosphate fertilizers. See Offshore Marketing.

At December 31, 2001, the Companys
sales and transportation and distribution functions were handled
by 193 employees in Chicago, Illinois and various other
locations in the United States and Brazil, and 16 employees
in Saskatoon, Saskatchewan.

North American Marketing

In 2001, North American net sales from potash
products represented 11% of the Companys total net sales,
substantially all of which was attributable to potash customers
in the United States. Typically, North American potash sales of
the Company are greatest in the first half of the year. The vast
majority of sales are made on the spot market with the balance
made under short-term contracts. The Company has no material
contractual obligations in connection with North American sales
to sell potash in the future at a fixed price.

In 2001, North American net sales from phosphate
products represented 26% of the Companys total net sales,
substantially all of which was attributable to phosphate
customers in the United States. Typically, North American
phosphate product sales are greatest in the first and second
calendar quarters. In 2001, the majority of
PCS Phosphates phosphate product sales were made on
the spot market, with the balance made under short-term
contracts (generally on an annual basis) and a limited number of
sales made pursuant to multi-year contracts. The Company has no
material contractual obligations in connection with North
American sales to sell phosphate in the future at a
fixed price.

I-10



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##### 



In 2001, North American net sales from nitrogen
products represented 40% of the Companys total net sales
and PCS Nitrogens non-fertilizer products accounted
for approximately 53% of PCS Nitrogens nitrogen
revenue. Typically, North American nitrogen fertilizer sales are
greatest in the second calendar quarter. In 2001, the majority
of PCS Nitrogens nitrogen product sales were made on
the spot market, with the balance made under short-term and
multi-year contracts. The Company has no material contractual
obligations in connection with North American sales to sell
nitrogen in the future at a fixed price.

Ammonia purchased by PCS Nitrogen is used in
the Companys operations and is sold to third party
customers by PCS Sales (USA), Inc.

The primary customers for fertilizer products are
retailers, dealers, cooperatives, distributors and other
fertilizer producers. Such retailers, dealers and cooperatives
have both distribution and application capabilities. The primary
customers for industrial products are chemical product
manufacturers. The majority of the Companys purified
phosphoric acid is sold directly to consumers of the product,
with the balance sold through an authorized non-exclusive
distribution network.

Offshore Marketing

Potash produced by the Company in Saskatchewan
for sale outside North America is sold to Canpotex, which is
owned in equal shares by the three potash producers in the
Province of Saskatchewan (including the Company). Canpotex,
which was incorporated in 1970 and commenced operations in 1972,
acts as an export company and as a unified marketing force for
all Saskatchewan potash production in the offshore marketplace.
Each shareholder of Canpotex has an equal voting interest as a
shareholder and through its nominees on the board of directors.
The Company and the other shareholders of Canpotex have agreed
that, as long as they are members of Canpotex, and with respect
to potash produced in Canada, they will not make offshore sales
independently. The Companys production from its
New Brunswick mine has been exempted from this requirement
by the members of Canpotex. Any member may terminate its
membership in Canpotex at specified times of the year on six
months notice.

In general, Canpotex sales are allocated among
the producers based on production capacity. If a shareholder
cannot satisfy demand for potash by Canpotex, the remaining
shareholders are entitled to satisfy the demand pro rata
based on their allotted production capacity. The Company
currently supplies 55.65% of Canpotexs requirements.
Canpotex sells potash to government agencies and private firms
pursuant to six-month contracts at negotiated prices or by
spot sales.

The following table sets forth the percentage of
sales by Canpotex for the past three calendar years in the
various geographical regions:

|              |  |      |      |      |  |      |      |  |  |  |      | 
|------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|              |  | 2001 |      | 2000 |  | 1999
|              |  |      |      |      |  |     
|Asia          |  |      | 73%  |      |  |      | 74%  |  |  |  | 75%  | 
|Latin America |  |      | 16   |      |  |      | 16   |  |  |  | 13   | 
|Oceania       |  |      | 8    |      |  |      | 6    |  |  |  | 8    | 
|Europe        |  |      | 3    |      |  |      | 4    |  |  |  | 4    | 
|              |  |      |      |      |  |      |      |  |  |  |      | 
|Total         |  |      | 100% |      |  |      | 100% |  |  |  | 100% | 
|              |  |      |      |      |  |      |      |  |  |  |      | 

For 2001, sales to Canpotex represented 11% of
the total net sales of the Company and net sales from offshore
sales of potash from the New Brunswick mine, through
PCS Sales (Canada) Inc., represented 3% of the total net
sales of the Company. Canpotexs marketing joint venture
for certain offshore markets (outside North America and Europe)
with JSC Uralkali, a Russian potash
producer, continues.

Since 1975, PhosChem has been the largest
exporter of U.S. phosphate fertilizers. Currently, the
members of PhosChem are PCS Phosphate, IMC Phosphates
Company (IMC-Phosphates), a joint venture between
IMC Global Inc. and Phosphate Resource Partners LLP, and
Mississippi Phosphates Corporation (MissChem). The
PhosChem members have agreed to export their fertilizer products
exclusively through PhosChem, except for exports to Canada, any
member state of the European Union or the

I-11



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##### 



European Economic Area, and sales through the
U.S. Agency for International Development Tenders and sales
to certain buyers affiliated with members. Historically,
PhosChem negotiated prices and other terms for the export sale
of its members phosphate fertilizer products. According to
the terms of a PhosChem agreement effective January 1,
1995, IMC-Phosphates is responsible for the marketing of solid
fertilizers (DAP, MAP and GTSP), and PCS Phosphate, or its
sales affiliate (PCS Sales (USA), Inc.), is responsible for
the marketing of liquid fertilizer products (MGA) to export
countries. Total sales for 2001 (on a P2O5 basis) were apportioned as follows:
75% to IMC-Phosphates; 14% to PCS Phosphate, and 11% to
MissChem. The PhosChem agreement is renewed annually. If the
PhosChem agreement is not renewed, the Company does not believe
the disbanding of PhosChem would materially affect the
Companys sales of fertilizer, but there can be no
assurance that, if PhosChem were to be disbanded, the Company
would be able to find alternative outlets for its products or
sell its products at prices or on terms similar to those
expected to be obtained by PhosChem.


Revenue from sales to PhosChem accounted for 3%
of the Companys total net sales in 2001. Other offshore
phosphate sales accounted for 3% of the Companys total net
sales in 2001. All of the Companys phosphate sales to
China and India were made through PhosChem. Most of the
Companys sales of phosphate products to China are made to
the central purchasing authority of the Chinese government.
Sales in India were made through the Fertilizer Association of
India to many independent buyers. In 2001, 68% of
PhosChems volume was in the form of DAP.

The following table sets forth the percentage of
DAP sales of PhosChem for the past three calendar years in the
various geographical regions:

|              |  |      |      |      |  |      |      |  |  |  |      | 
|------------- |  | ---- | ---- | ---- |  | ---- | ---- |  |  |  | ---- | 
|              |  | 2001 |      | 2000 |  | 1999
|              |  |      |      |      |  |     
|Asia          |  |      | 82%  |      |  |      | 89%  |  |  |  | 91%  | 
|Latin America |  |      | 8    |      |  |      | 5    |  |  |  | 5    | 
|Oceania       |  |      | 10   |      |  |      | 6    |  |  |  | 4    | 
|              |  |      |      |      |  |      |      |  |  |  |      | 
|Total         |  |      | 100% |      |  |      | 100% |  |  |  | 100% | 
|              |  |      |      |      |  |      |      |  |  |  |      | 

With respect to offshore sales of nitrogen,
ammonia and urea sales predominate and originate primarily from
Trinidad, with other sales coming from purchased product
locations. For 2001, net sales from offshore sales of nitrogen
represented 3% of the net sales of the Company.

Offshore sales are subject to those risks
customarily encountered in foreign operations, including
(i) fluctuations in foreign currency exchange rates,
(ii) changes in currency and exchange controls,
(iii) the availability of foreign exchange, (iv) laws,
policies and actions affecting foreign trade and (v) other
economic, political and regulatory policies of foreign
governments.

Distribution and Transportation

The Company has an extensive infrastructure and
distribution system to transport and store its products. Other
than storage facilities located at production plants, the
Company used approximately 165 locations to store and handle its
products in the field in 2001. The Company owns or leases
approximately 5,000 railcars.

Transportation costs add significantly to the
total amounts paid by purchasers of potash. Producers have a
definite advantage in markets close to their sources of supply
(e.g., Saskatchewan producers in the Midwestern United
States, New Brunswick producers on the U.S. Eastern
Seaboard and New Mexico producers in the Southern and Western
United States). International shipping cost variances permit
offshore producers (including those in the Former Soviet Union
(FSU), Germany, Israel and Jordan) to compete
effectively in some of the Companys
traditional markets.

Most of the Companys potash for North
American customers is shipped by rail. Shipments are also made
by rail from each of the Companys Saskatchewan mines to
Thunder Bay, Ontario, for shipment by lake vessel to the
Companys warehouses and storage facilities in Canada and
the United States.

I-12



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##### 



Potash from the New Brunswick mine is
shipped primarily by ocean-going vessel from the Port of
Saint John, although truck and rail transport are also used
for North American customers.

In the case of the Companys sales to
Canpotex, potash is transported by rail principally to
Vancouver, British Columbia, where port facilities exist for
storage pending shipment overseas. The Company has an equity
interest in Canpotex Bulk Terminals Limited, which is a part
owner of these port facilities. The Company, through Canpotex,
also has an interest in a port facility located in
Portland, Oregon.

With respect to phosphates, the Company has
long-term leases on shipping terminals in Morehead City and
Beaufort, North Carolina, through which it receives and stores
raw materials for, as well as the products manufactured by, the
Aurora facility. The Company uses barges and tug boats to
transport solid products, phosphoric acid, sulfuric acid and
sulfur between the Aurora facility and Morehead City, North
Carolina. Raw materials and products are also transported to and
from the Aurora facility by rail. The Company transports sulfur
it purchases from Canada in large, dedicated unit trains. Both
CSX Corporation and Norfolk Southern Corporation serve the
Aurora facility. The Company also built a multi-purpose ocean
going vessel to carry raw material and products to and from the
Aurora facility. The Company receives ammonia for its phosphate
operations at Aurora through its ammonia terminal in Savannah,
Georgia; the ammonia is shipped by rail from Savannah to the
Aurora facility.

Sulfur is delivered to the White Springs facility
by unit trains from Canada and by rail from multiple domestic
sources. Until 1999 the Norfolk Southern Corporation was the
only railroad providing service for the White Springs
facility. However, a nearby transload facility at
Lake City, Florida, which became operational in 1999, is
serviced by the CSX Corporation. Most of the phosphoric acid and
chemical fertilizers produced at the White Springs facility
are shipped to domestic destinations by rail. The Company also
ships some of its products, produced at the White Springs
facility, through the bulk terminal located in
Morehead City, North Carolina, for offshore sales.

Much of the Geismar facilitys phosphoric
acid and sulfuric acid is delivered via pipeline to nearby
customers. The balance of the facilitys phosphate products
are shipped by rail or tank truck. Phosphate rock feedstock is
delivered to Geismar from Morocco in large ocean going vessels.
Sulfur is delivered to the Geismar facility by truck from
local suppliers.

The Company makes domestic deliveries of animal
feed products (bulk and bagged) by rail or truck from its
manufacturing facilities and from several warehouses supplied
from its manufacturing facilities.

The Company distributes its nitrogen products by
barge, railcar, truck, and direct pipeline to its customers and
through its strategically located storage terminals in high
consumption areas. The Company leases or owns approximately
55 nitrogen terminal facilities with an aggregate storage
capacity of approximately 500,000 tons of product. The
terminals provide off-season storage and also serve local
dealers during the peak seasonal demand period.

The Company distributes products from the
Trinidad plant to markets in Latin America and Europe in
addition to the United States. The Companys distribution
operations in Trinidad employ two long-term chartered
ocean-going vessels and utilize spot charters as necessary for
the transportation of ammonia. All bulk urea production is
shipped through third-party carriers.

The Company distributes product from the Yumbes
operation by truck within Chile and by vessel offshore. The
production from the Brazilian feed plant is sold within Brazil
and transported by truck.

Competition

The markets for potash, both domestic and
foreign, are highly competitive. Since potash is a commodity,
producers must compete based on price and service
(e.g., delivery time and ability to supply all grades).
Apart from competitive pricing, the Companys principal
method of competition is the quality of service it provides to
customers. Among other things, the Company provides quality
service by maintaining warehouses and leasing railcars to
enhance its delivery capability. The high cost of transporting
potash limits competition in various areas.

I-13



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##### 



The Companys potash competition includes
three North American producers and potash producers located
outside North America in the FSU, Israel, Jordan, Germany and
France. Because of the high capital cost and lead time required
to construct a new mine, the Companys principal
competition is expected to continue to come from the owners of
existing operations.

Many phosphate products, particularly solid
fertilizers, are commodities, with little or no product
differentiation, and thus trade on the basis of prices
determined in highly competitive markets. The vast majority of
the U.S. phosphate rock not mined by the Company is
produced in central Florida, southeast of Tampa, and most of the
U.S. phosphate processing capacity, other than at the
Aurora facility, is located in Florida and along the coast of
the Gulf of Mexico.

The Companys principal advantage at Aurora
in competing with other producers is that it operates integrated
phosphate mine and phosphate processing complexes, while most of
its competitors are required to ship phosphate rock by rail or
truck from their mines to their chemical processing plants, thus
incurring substantially higher transportation costs.

As a result of its location in North Carolina and
the relatively high cost of transportation, the Companys
U.S. phosphate sales from Aurora have a natural advantage
in the Northeast, mid-Atlantic and eastern Midwest regions,
while White Springs and other Florida producers have a
natural advantage in the South, and Gulf Coast producers have a
natural advantage in areas of the Midwest accessible to barge
traffic up the Mississippi River.

The Company also competes with governmental
enterprises and independent phosphate producers in important
exporting countries, including Morocco, Tunisia, Jordan, South
Africa and Australia.

The animal feed supplement business in the
phosphate segment is commodity like, however, opportunities to
nutritionally differentiate exist. The Company has a significant
presence in the domestic feed supplement market.

Although there has been extensive consolidation
and privatization worldwide, substantial competition exists in
the nitrogen industry. The Company competes domestically with a
broad range of companies in the production and sale of nitrogen
products, including subsidiaries of larger chemical companies,
farm cooperatives, integrated energy companies and independent
fertilizer companies. Because fertilizer is a commodity,
competition takes place largely on the basis of price and
delivery. The relative cost of, and availability of
transportation for, raw materials and finished products to
manufacturing facilities and markets are important
competitive factors.

The Company also competes with foreign companies
whose nitrogen products are imported into the U.S. Although
diminishing in number, various foreign competitors receive
subsidies from their governments. Some countries also have
natural gas supplies that are surplus to domestic demand. This
surplus natural gas may have a low alternative value and, when
used as feedstock for the manufacture of ammonia and urea, can
result in low-cost production. These low-cost products are being
imported into the U.S. and compete with domestically
manufactured nitrogen fertilizers, including the Companys.
In addition, other importers subsidized by their governments may
import products into the U.S. for reasons not related to
U.S. fertilizer market conditions, such as a need to obtain
U.S. dollars. In addition to competing domestically with
such foreign producers, the Company, by virtue of its Trinidad
production, also competes directly in sales to Latin America
and Europe.

The Companys nitrogen production capability
is currently the second largest in the Western Hemisphere. The
Companys domestic nitrogen plants serve agricultural
markets with a diversified crop base that spans a lengthy
growing season and chemical industrial manufacturers located
throughout the U.S. Those plants are strategically located
in agricultural as well as industrial end-use markets in the
Southeast, Midwest and Gulf Coast regions. The Company believes
that it is more economical to transport natural gas, the primary
raw material in the production of nitrogen fertilizers and
chemicals, to plants situated in the product markets than to
transport such products over long distances. The Company
concentrates its nitrogen marketing efforts on these nearby
markets where lower transportation costs offer the potential for
better margins. The Company believes that its product mix
diversity and the number and geographic diversity of its
nitrogen plants provide

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competitive advantages in manufacturing,
distribution, marketing, customer service and other areas. In
addition, the industrial demand for nitrogen products is
typically less volatile and follows different demand cycles than
agricultural demand for fertilizer. The Company believes that
its industrial sales add a measure of stability to its revenue
and are a desirable complement to agricultural demand.


Employees

At December 31, 2001, the Company actively
employed 4,997 persons, of whom 1,817 were salaried and
3,180 were hourly paid. Of these employees, the Companys
potash operations employed 1,753 people, the phosphate
operations 1,997, and the nitrogen operations 795. Excluding
sales personnel, the Saskatoon and Northbrook offices had a
staff of 243. The Companys sales group employed
209 people.

The Company has entered into nine collective
bargaining agreements with labor organizations representing
employees. The collective bargaining agreements at the Allan,
Cory and Patience Lake divisions expire on April 30, 2002.
The Lanigan agreement expires on January 31, 2003. The
Company and the Rocanville Potash Employees Association have a
contract that expires on May 31, 2003. The agreement
between IMC and the union representing the employees at the
Esterhazy mine expires on January 31, 2004. The union
agreement at PCS Cassidy Lake expired December 31,
2001 and negotiations are continuing. The collective bargaining
agreement with the union representing employees at the
White Springs plant expires on December 1, 2003 and
the collective agreement at the PCS Purified Phosphates
facility in Cincinnati expires November 1, 2004.
PCS Nitrogen has one location in Memphis with a collective
bargaining agreement which expires September 17, 2004. In
addition, the agreement between BPC and the union representing
employees at the Lima plant expires February 17, 2006. The
Company believes its relations with its employees to
be good.

Royalties and Certain Taxes

Saskatchewan potash production is taxed at the
provincial level under The Mineral Taxation Act, 1983
(Saskatchewan). This tax consists of a base payment and a profit
tax. In addition to the Potash Production Tax, rental fees,
taxes and royalties are payable to the Province of Saskatchewan
and municipalities by potash producers in respect of potash
reserves or production of potash in the Province of
Saskatchewan. The Companys taxes, fees and royalty
expenses were $61.4 million in 2001.

The Company is subject to capital tax on its
paid-up capital (as defined in The Corporation Capital Tax Act
of Saskatchewan) and its taxable capital (as defined in the New
Brunswick Income Tax Act). In addition, a resource corporation
in the Province of Saskatchewan pays a corporate capital tax
surtax based on the value of Saskatchewan resource sales. This
surtax is only payable to the extent that it exceeds the regular
capital tax. In 2001, the Company paid capital tax of
$5.8 million and surtax of $12.6 million.

The Company pays royalties to the New Brunswick
government on the basis of production from its New Brunswick
mine. In addition, the Company pays municipal taxes. The
Companys expenses for such royalties and municipal taxes
were $3.9 million in 2001.

The Company does not make royalty payments in
connection with its phosphate and nitrogen operations.

Income Taxes

PCS and certain subsidiaries are subject to
federal income taxes (which includes the Large Corporations Tax)
and provincial income taxes in Canada.

The subsidiaries of the Company which operate in
the United States are subject to U.S. federal and state
income taxes. These subsidiaries are not currently subject to
federal cash income taxes by virtue of net operating losses
incurred. The Companys nitrogen subsidiaries operating in
Trinidad are subject to Trinidad taxes.

The effective consolidated rate for 2001 was 36%
of pre-tax income (2000  27%  exclusive of
the gain on disposal of shares of a subsidiary recorded in the
first quarter of 2000).

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Research and Development

The Company maintains potash research and
development facilities located in Saskatoon, Saskatchewan,
employing approximately 30 persons who concentrate on
improving efficiency in mine operations and product quality.
Research continues on the use of three-dimensional seismic
methods and other geophysical tools to detect geological
disturbances in potash ore bodies. The Company is also
proceeding with automation of mining machines and improving
process control in mills. Other research includes new product
development and measures to maintain and enhance product quality
in transit and at offsite storage facilities. The Company funds
research in agronomy through Potash & Phosphate
Institute programs.

The Company is exploring ways of further
debottlenecking its phosphate and nitrogen production
facilities, selectively adding capacity and otherwise enhancing
production and process efficiencies through technological
enhancements. Development work has also identified new markets
for existing products and methods to enhance product quality.
The Geismar facility is exploring the possibility of
manufacturing gypsum product from its phosphoric
acid operations.

Environmental Matters

The Companys operations are subject to
numerous environmental requirements under Canadian, U.S.,
Chilean, Brazilian and Trinidad and Tobago federal, provincial,
state and local laws and regulations. Such laws and regulations
govern, among other matters, air emissions, waste water
discharges, land use and reclamation and solid and hazardous
waste management. Many of these laws and regulations are
becoming increasingly stringent, and the cost of compliance with
these requirements can be expected to increase over time. An
on-going U.S. federal grand jury investigation regarding
environmental matters at the Geismar facility and other
environmental matters that are the subject of investigation or
litigation are discussed under the heading
Legal Proceedings.

The Company believes that it is currently in
material compliance with applicable environmental laws and
regulations. The Company believes that it is well positioned to
meet anticipated requirements under the applicable environmental
laws and regulations. Although significant capital expenditures
and operating costs have been incurred and will continue to be
incurred on account of environmental laws and regulations, the
Company does not believe, except as otherwise set out herein,
that such environmental laws and regulations have had, or will
have, a material adverse effect on its business. However, the
Company cannot predict the impact of new or changed laws or
regulations or permit requirements, including the matters
discussed below, or changes in the ways that such laws and
regulations are administered, interpreted, or enforced. The
Company anticipates that its routine expenditures related to
environmental regulatory matters in 2002 will not differ
materially from the previous year.

The Company and its facilities are also subject
to various environmental statutes and programs focused on site
reclamation and restoration and on investigation and, where
necessary, remediation of contaminated properties. The
Companys obligations and potential liabilities under these
programs have been and can be expected to continue to be
significant. The Company does not believe, except as set out
herein, that such obligations and potential liabilities have
had, or will have, a material adverse effect on its business.
However, it is often difficult to estimate and predict the
potential costs and liabilities associated with these programs
and there is no guarantee that the Company will not in the
future be identified as potentially responsible for additional
costs under these programs, either as a result of changes in
existing laws and regulations or as a result of the
identification of additional matters or properties covered by
these programs.

Environmental Expenditures

Reclamation and Restoration Costs

Site restoration and reclamation costs have been
accrued for various sites. At December 31, 2001, the
Company had accrued the following amounts for site reclamation
and restoration: $28.1 million for the Aurora facility,
$52.6 million for the White Springs facility,
$18.4 million for certain PCS Joint Venture facilities, and
$3.9 million for the Cassidy Lake facility. The
current portion of restoration and reclamation costs accrued in

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2001 totalled $20.3 million. These amounts
represent the Companys current estimate of potential site
restoration and reclamation costs as last assessed in December
2001. The expenditures are generally incurred over an extended
period of time.


Annual environmental expenditures for reclamation
and restoration during the year ended December 31, 2001
were $64.3 million. Of this amount, $49.7 million was
charged to operations, $13.7 million was capitalized and
$0.9 million was charged against accrued
reclamation costs.

Capping of Byproduct Gypsum Stacks

Production of phosphoric acid also produces
gypsum, which is normally placed in above-ground storage areas
called gypsum stacks. Various jurisdictions have established
programs that require companies to reduce the potential
environmental impacts associated with gypsum stacks. In Florida,
these regulations require companies to cap the
gypsum stacks in order to reduce seepage into groundwater when
such stacks reach their design capacity (for the Company, in
approximately 35 years at current operating rates), or if
groundwater standards are not being met. The Company has
submitted documentation to the Florida Department of
Environmental Protection (FDEP) to demonstrate its
compliance with the groundwater standards. The Company expects
to be allowed to continue using the three gypsum stacks at the
White Springs facility for their remaining useful lives. At
December 31, 2001, a balance of $35.4 million was
included in accrued reclamation costs for this gypsum stack
capping requirement. The obligations of White Springs
regarding the gypsum stacks are guaranteed by PCS.

The Company also has gypsum stacks at the Aurora
facility in North Carolina and the Geismar facility in
Louisiana. In North Carolina, on exhaustion of the mines
phosphate reserves, disposition of the remaining gypsum must
comply with the laws in effect at that time. The inactive
portions of the gypsum stacks at the Geismar facility are capped
and have water management systems in place. Under the current
laws in North Carolina and Louisiana, the closure or
decommissioning of the gypsum stacks at these two facilities is
not expected to have a material adverse effect on the
Companys business.

Other Environmental Costs

The Companys operating expenses, other than
reclamation and restoration and gypsum stack capping, relating
to compliance with environmental laws and regulations governing
on-going operations were approximately $21.8 million for
the year ended December 31, 2001 as compared to
$23.0 million for the year ended
December 31, 2000.

Capital Expenditures

The Company routinely undertakes capital projects
to improve pollution control facilities. In 2001, a total of
approximately $14.5 million in capital expenditures
(exclusive of capitalized reclamation expenditures) was spent to
meet the Companys environmental control objectives as
compared to $11.7 million in 2000. The Company expects that
its capital requirements for environmental projects may increase
in the future due to increasingly stringent environmental
regulations arising from current and future requirements
of law.

With respect to air emissions, the Company
anticipates that additional expenditures may be required to meet
increasingly stringent U.S. federal and state regulatory
and permit requirements, including existing and anticipated
regulations under the U.S. federal Clean Air Act as amended
in 1990. Both federal and state regulation of hazardous air
pollutants are expected to require additional air emission
control equipment and increased operating expenditures at some
U.S. facilities. In particular, recent rules require
specific new controls for hydrogen fluoride emissions in
phosphoric acid production. Some states, including Louisiana,
also regulate ammonia and nitric acid as hazardous air
pollutants. Further, the U.S. Environmental Protection
Agency (EPA) has published new National Ambient Air
Quality Standards for both ozone and particulate matter which
are more stringent than existing standards and has issued a
number of regulations establishing requirements to reduce
nitrogen oxide (NOx) emissions and other criteria air pollutant
emissions. Louisiana and Georgia are considering approaches for
atmospheric ozone control which may include additional controls

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and restrictions for NOx. The Company continues
to monitor developments in these various programs and to assess
their potential impact on the Companys operations.


The federal Clean Air Act operating permit
program requires the addition of enhanced emissions monitoring
equipment at some facilities, as well as the imposition of
permit fees based upon facility air pollutant emissions. It has
been and may be necessary for the Company to obtain
preconstruction air permits (under either the federal Prevention
of Significant Deterioration or New Source Review programs) when
the Company expands U.S. plants. Such permits impose
certain restrictions on air pollutant emissions from the
expanded plants and compliance with those restrictions sometimes
require installation and use of pollution control devices.

Site Assessment and
Remediation

In addition to environmental regulation of its
current operations, the Company also may incur costs and
liabilities in connection with its and its predecessors
past and current waste disposal practices and ownership and
operation of real property and facilities, as well as its mining
activities. The U.S. federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980
(CERCLA) and other U.S. federal and state laws
impose liability on, among others, past and present owners and
operators of properties or facilities at which hazardous
substances have been released into the environment and persons
who arrange for disposal of hazardous substances that are
released into the environment. Liability under these laws may be
imposed jointly and severally and without regard to fault or the
legality of the original actions, although such liability may be
divided or allocated according to various equitable and other
factors. In the course of its current and former operations,
including those of divested and acquired businesses, the Company
has generated, and with respect to its current operations,
continues to generate wastes that could result in liability for
the Company under these laws.

In 1998, the Company, along with other parties,
was notified by EPA of potential liability under CERCLA with
respect to certain soil and groundwater conditions at a
PCS Joint Venture blending facility in Lakeland, Florida
and certain adjoining property (collectively referred to as the
Landia Site). In 1999, PCS Joint Venture signed
an Administrative Order on Consent with EPA pursuant to which
PCS Joint Venture agreed to conduct a Remedial
Investigation and Feasibility Study (RI/FS) of these
conditions. PCS Joint Venture and another party are sharing
the costs of the RI/FS, which is continuing on schedule and is
projected to be completed in June 2003. In 2000, PCS Joint
Venture and another party entered into a second Administrative
Order on Consent pursuant to which they conducted certain
interim response activities at the Landia Site. These interim
response activities have been completed and approved by EPA.

Conditions at the Landia Site also were the
subject of a Complaint and Petition for Enforcement issued by
the Florida Department of Environmental Protection
(FDEP) in 1997 against PCS Joint Venture and
others. This matter, which had been relatively inactive since
the involvement of EPA in the Landia Site, was settled by
PCS Joint Venture and others in 2001 by paying a portion of
FDEPs claim for past costs incurred by FDEP in connection
with the Landia Site.

In 1994, PCS Joint Venture responded to
requests for information from both EPA and the Georgia
Department of Natural Resources, Environmental Protection
Division (GEPD) regarding conditions at its
Moultrie, Georgia location. Subsequent investigations have
confirmed the presence of lead-contaminated soil and groundwater
at the site. PCS Joint Venture believes that this lead
contamination is attributable to former operations at the site
prior to PCS Joint Ventures ownership. PCS Joint
Venture submitted a proposed Corrective Action Plan
(CAP) to GEPD in 1999. PCS Joint Venture has
also conducted and submitted an assessment of the site. GEPD
continues to review the assessment and the CAP and has not yet
made a decision regarding further action at the site.

PCS Joint Venture is cooperating with
regulatory authorities in their investigations of the Lakeland
and Moultrie sites. It is also attempting to determine the
number and location of other parties who may be liable for
remediation of these sites. However, because site assessments
are on-going and because other parties may be liable for some or
all costs of remediation, the ultimate liability of
PCS Joint Venture has not yet been determined.

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The Company is also engaged in on-going site
assessment and/or remediation activities at a number of other
facilities currently or previously owned or operated by the
Company. In each instance, the Company is working with the
appropriate regulatory authorities to address these sites. In
addition, the Company has in the past received notices
identifying it as a potentially responsible party with respect
to certain sites that were never owned or operated by the
Company. The Company has reviewed information pertinent to these
sites and has responded to each of these notices. Based on
current information about these various facilities and sites and
other potentially responsible parties, the Company believes that
the Companys future obligation with respect to these
facilities and sites will not have a material adverse effect on
the Companys financial condition or results of operation.

Permits and Regulatory
Approvals

Many of the Companys operations and
facilities are required by federal, provincial, state and local
environmental laws to obtain and operate in compliance with a
range of permits and regulatory approvals. Such permits and
approvals typically have to be renewed or reissued periodically.
The Company may also become subject to new laws or regulations
that require it to obtain new or additional permits or
approvals. The Company believes that it is currently in material
compliance with its existing permits and regulatory approvals.
However, there can be no assurance that such permits or
approvals will issue in the ordinary course. Further, the terms
and conditions of future permits and approvals may be more
stringent and may require increased expenditures on the part of
the Company.

A significant portion of the Companys
phosphate reserves in Aurora, North Carolina is located in
wetlands and, under the U.S. federal Clean Water Act, a
permit must be obtained from the U.S. Army Corps of
Engineers (the Corps) before mining activity that
will disturb the wetlands may occur. On August 14, 1997,
the Corps issued a permit to the Company granting approval to
mine certain areas, subject to mining being completed no later
than 2017. The permit contains a section on wetlands mitigation
approach and methods regarding wetland impacts associated with
mining covered by the permit. The Company has acquired
additional land adjacent to the Aurora Facility for mitigation
purposes. In order to demonstrate the feasibility of such
activities, as of December 31, 2001, the Company had
created or restored 2,904 acres of wetlands.

On May 6, 1999, the Southern Environmental
Law Center (SELC) and the Pamlico-Tar River
Foundation (PTRF) gave notice to the EPA and the
Department of the Army of their intent to file a citizens suit
under the Clean Water Act contesting the August 14, 1997
Corps permit. To date, no such action has been filed. The
Company and the Corps believe that the permit was properly
issued. The Company has continued mining in accordance with the
permit under the supervision of the Corps. Although a
considerable period of time has passed since the SELC and PTRF
issued the notice of intent to sue, the Company intends to
closely monitor this matter and take any steps needed to protect
its ability to continue the operations authorized by
the permit.

In addition to the wetlands permit from the
Corps, the Company also needs additional authorizations from
agencies of the State of North Carolina to continue its mining
activities in North Carolina. The Company is required to have
State mining permits that contain bonding and reclamation
requirements. The Company has a State mining permit for the
areas presently being mined by the Company that is effective
through 2003, but this permit must be amended periodically to
add additional acreage during this period. The Company also
holds another mining permit from the State for the area of the
property that contains the wetlands covered by the permit issued
by the Corps. This State permit has been renewed until 2005. In
addition, on November 2, 2000 the Company applied for
authorization from the Corps to continue its mining advance on
the peninsula it is currently mining once the currently
permitted reserves on that peninsula have been depleted.

The gypsum stacks at the White Springs facility
will continue to be used and when closed will be covered or
capped to the extent required under applicable regulations. The
Florida Phosphogypsum Rule permits the use of existing gypsum
stacks until they reach capacity, if groundwater standards are
met. Due to the curtailment of phosphoric acid production at the
White Springs facility, the Company has requested and
received authorization for the temporary deactivation of two of
the three gypsum stacks. This request must be

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renewed annually as long as the gypsum stacks are
temporarily inactive. If this request were not granted and the
stacks remained inactive, then the closure and capping
requirements for gypsum stacks would become applicable to these
two stacks. See Environmental Expenditures 
Capping of Byproduct Gypsum Stacks.


Lands mined by White Springs after July 1,
1975 and unmined lands used in certain mining operations after
July 1, 1984 are subject to mandatory reclamation
requirements of the State of Florida. Wetlands must be reclaimed
on an acre-for-acre basis under the rules of the FDEP unless
otherwise provided in, or pursuant to, a Memorandum of Agreement
(MOA), dated February 1, 1995, between OxyChem
and FDEP (which agreement was later assigned to the Company).
The MOA established alternate procedures for the Company to
follow. The current practice of White Springs is to return most
upland areas to commercial pine plantation, which is the
predominant pre-operation land use. Reclaimed lands include
uplands, wetlands and lakes.

Land reclamation at White Springs is currently
performed pursuant to federal, state, and local regulatory
approvals granted in 1996 and 1997 to implement the 1995 MOA.
The MOA provides for mitigation of mining impacts in a portion
of the mining area, particularly impacts to wetlands, to be done
through funding of public acquisition of environmentally
sensitive lands in the region. Land reclamation continues to be
done on-site but is undertaken using the alternate standards of
the MOA which do not require the on-site reclamation of wetlands
and which allow for the construction of lands that are expected
to be of greater future utility. The Companys
contributions for the land acquisition program through 2001
totalled $5.85 million.

White Springs has initiated a process for
securing an additional federal permit from the Corps and
ancillary modifications of state and local regulatory approvals
needed for continuation of mining operations in wetland areas
beyond the expiration of its current federal permit in October
of 2007. For both Aurora and White Springs, the Corps
permitting process involves environmental studies of potential
mining areas and evaluation of mine plan and reclamation
alternatives. All affected regulatory authorities, various
commenting agencies, and interested outside parties are
participating in the process. Selection of mine plan and
reclamation alternatives and the results of the environmental
studies could result in changes to reclamation and mitigation
practices with higher costs and changes to mining areas with
reserve impacts. The magnitude of such cost impacts cannot be
estimated until the studies and evaluations are completed.
Failure to secure the required approvals for continuation of the
mining operations under any reclamation or mitigation
alternative would negatively affect reserves and costs.

Potash Decommissioning
Regulations

The environmental regulations of the Province of
Saskatchewan require each potash mine to have decommissioning
and reclamation (D&R) plans. Financial assurances for these
plans must be established within one year following approval of
these plans by the responsible provincial minister. Pursuant to
the regulations, the Company filed D&R plans with the
Minister of the Environment for Saskatchewan, in the spring of
1997. In February 1998, the Company was advised that, although
the D&R plans were technically acceptable, the
regulatory agency did not accept the schedule proposed to
decommission the waste salt piles. Following further discussions
between the provincial potash industry and the regulatory
agency, the Company was advised in July 2000 that the
D&R plans submitted in 1997 were accepted, provided
that the plans are revised by 2005. A government-industry task
force was established to produce mutually acceptable revisions
of the plans which would incorporate a cost benefit analysis of
the decommissioning options. The process of revising the
D&R plans is continuing. In 2001, agreement was reached
with the Provincial Government on the financial assurances for
the D&R plan to cover the interim period before 2005.
In July 2001, a $2.0 million (Cdn) Letter of Credit was
posted and it will remain in effect until the revised plans are
accepted. Because of the uncertainty regarding the final nature
of the D&R plans, the timing of implementation and the
structure of the financial assurance, the Company is unable, at
this time, to accurately estimate the financial implications of
the plans.

Government Regulations

In September 1987, legislation was adopted in
Saskatchewan that authorized the government to control
production at potash mines located in the Province of
Saskatchewan. The legislation, which has not taken effect but
which can be brought into effect by proclamation of the Cabinet
of Saskatchewan, permits the

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Cabinet, and the Potash Resources Board which
would be created under such legislation, to prescribe rates of
potash production in Saskatchewan and to allocate production
among individual mines. The Company cannot predict at this time
if or when the legislation will be proclaimed or its impact on
the Companys financial condition or results
of operations.


Since the terrorist attacks on September 11,
2001, the Company, like other industrial and commercial
entities, has heightened its evaluation of potential security
concerns associated with its operations. In particular, at its
nitrogen facilities, the Company is assessing its current
security measures, and has independently adopted enhancements
there. Further, the Company has implemented procedures for
contract transporters which contribute to safer transportation
and delivery of many of the Companys products. In the
United States, Congress is considering federal legislation
designed to reduce the risk and enhance advance detection of
future terrorist acts. Moreover, several governmental agencies
and industry groups are considering regulatory or program
enhancements and initiatives to the same end. At this time, the
Company is unable to predict the potential costs to it of any
such governmental responses or initiatives.

Executive Officers of the Company

The name, age, period of service and position
held for each of the executive officers of the Company as at
March 15, 2002 are as follows:

|                    |  |     |    |        |  |               |      |  |  |                                                                          
|------------------- |  | --- | -- | ------ |  | ------------- | ---- |  |  | -------------------------------------------------------------------------
|                    |  |     |    | Served |  |              
|Name                |  | Age |    | Since  |  | Position Held
|                    |  |     |    |        |  |              
|WILLIAM J. DOYLE    |  |     | 51 |        |  |               | 1987 |  |  | President and Chief Executive Officer                                    
|JAMES F. DIETZ      |  |     | 55 |        |  |               | 1997 |  |  | Executive Vice President &
	Chief Operating Officer                      
|WAYNE R. BROWNLEE   |  |     | 49 |        |  |               | 1988 |  |  | Senior Vice President, Treasurer and
	Chief Financial Officer            
|JOHN L. M. HAMPTON  |  |     | 48 |        |  |               | 1988 |  |  | Senior Vice President, General Counsel
	and Secretary                    
|BETTY-ANN L. HEGGIE |  |     | 48 |        |  |               | 1981 |  |  | Senior Vice President, Corporate Relations                               
|BARRY E. HUMPHREYS  |  |     | 58 |        |  |               | 1976 |  |  | Senior Vice President and
	Chief Information Officer                     
|BARBARA JANE IRWIN  |  |     | 46 |        |  |               | 2000 |  |  | Senior Vice President, Administration                                    
|G. DAVID DELANEY    |  |     | 41 |        |  |               | 1997 |  |  | President, PCS Sales                                                     
|GARTH W. MOORE      |  |     | 53 |        |  |               | 1982 |  |  | President, PCS Potash                                                    
|THOMAS J. REGAN, JR |  |     | 57 |        |  |               | 1995 |  |  | President, PCS Phosphate                                                 
|KAREN G. CHASEZ     |  |     | 48 |        |  |               | 2000 |  |  | Vice President, Procurement,
	PCS Administration (USA)                   
|ROBERT A. JASPAR    |  |     | 43 |        |  |               | 1997 |  |  | Vice President, Internal Audit                                           
|DONALD R. ROBERTS   |  |     | 62 |        |  |               | 1993 |  |  | Vice President, Safety, Health and Environment,
	PCS Administration (USA)
|DENIS A. SIROIS     |  |     | 46 |        |  |               | 1978 |  |  | Vice President and Corporate Controller                                  

All of the officers have had the principal
occupation indicated for the previous five years except as
follows: Mr. Doyle was President and Chief Operating
Officer of the Company from July 1, 1998 to July 1,
1999 and was President PCS Sales from March 1997 to July
1998. Mr. Dietz was Executive Vice President of
PCS Nitrogen from March 1997 to July 1998 and President of
PCS Nitrogen from July 1998 to November 2000. On
July 12, 1999, Mr. Brownlee was appointed Senior Vice
President, Treasurer and Chief Financial Officer.
Mr. Brownlee was Senior Vice President Expansion and
Development from May 1995 to July 1999. On July 12, 1999,
Mr. Humphreys was appointed Senior Vice President and Chief
Information Officer. Mr. Humphreys was Senior Vice
President Finance and Treasurer and Chief Financial Officer from
December 1989 to July 1999. Prior to October 2000,
Ms. Irwin was a Consultant and Principal with Hewitt
Associates LLC, human resources consultants. Mr. Delaney
was appointed President, PCS Sales on March 24, 2000.
Mr. Delaney was Vice President, Industrial Sales of
PCS Sales from March 1997 to

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March 24, 2000. Mr. Regan was Executive
Vice President of PCS Phosphate from March 1997 to July
1999. Ms. Chasez was Vice President,
Administration & Business Affairs for British Sulphur
North America Inc. from June 1990 to May 2000. Mr. Jaspar
was Director, Internal Audit from January to November 2000 and
Senior Auditor of the Corporation from July 1997 to December
1999 and Senior Manager at Deloitte & Touche prior to
July 1997. Mr. Roberts was Vice President, Technical
Services, PCS Potash from April 1997 to May 2000 and
General Manager, New Brunswick Division prior to April 1997.


ITEM 3.     Legal
Proceedings.

Former Arcadian Executive
Proceedings

On May 7, 1997, J. Douglas Campbell,
Alfred L. Williams and Peter H. Kesser, former
officers of Arcadian, filed lawsuits against the Company in the
United States District Court for the Western District of
Tennessee. The complaints allege that the Company breached
employment agreements between Arcadian and the officers and
breached the related assumption agreement among the Company,
PCS Nitrogen, and Arcadian. The complaints of
Mr. Campbell, Mr. Williams and Mr. Kesser sought
damages in excess of $22.2 million, $6.2 million and
$3.7 million, respectively, including amounts sufficient to
offset the impact of certain excise taxes (the Excise Tax
Gross Up). On December 1, 1998 the court entered
judgments in the amounts of $12.7 million,
$3.2 million, and $2.6 million in favor of
Mr. Campbell, Mr. Williams and Mr. Kesser, plus
the Excise Tax Gross Up. On February 2, 2001, the Appellate
Court substantially affirmed the judgment and remanded the case
for further proceedings. The Company and PCS Nitrogen had
filed an action in the Circuit Court of Tennessee against
Messrs. Campbell, Williams and Kesser for declaratory
relief and damages. The Company and PCS Nitrogen alleged
that the defendants committed breaches of their fiduciary
duties, corporate waste and self dealing related to the
negotiation of, obtaining approval for, and execution of their
employment agreements. On December 31, 2001, the Company
and PCS Nitrogen and the former Arcadian executives entered
into a comprehensive settlement of the lawsuits (including
dismissal of the relevant state court action), which settlements
did not have a material adverse effect on the Companys
financial condition or results of operations.

Geismar Facility
Investigation

On May 11 and May 12, 1999,
representatives of the EPA, Federal Bureau of Investigation, and
other state and local agencies (governmental
agencies) executed a search warrant issued by the United
States District Court for the Middle District of Louisiana on
the Geismar facility in connection with a grand jury
investigation. In executing the search warrant, the governmental
agencies seized documents and electronic media, performed
environmental sampling, and interviewed Geismar facility
employees and contract employees. In addition, the governmental
agencies have contacted current and former Geismar facility and
Company employees in connection with the investigation. The
Company has also been served with grand jury subpoenas
requesting documents and other information from the Geismar
facility and PCS Nitrogens headquarters. The grand
jury investigation is continuing and, in May 2001, the Company
learned that the targets of the investigation include the
Company and certain current and former employees, including
individuals with current and/or previous management
responsibility for the Companys nitrogen operations. The
Company is also conducting its own internal investigation. The
Company cannot predict at this time what may result from the
governments investigation or whether any such result would
have a material adverse effect on the Company.

Environmental Proceedings

For a description of certain environmental
proceedings involving the Company, see Environmental
Matters.

ITEM
4.     Submission of Matters to a Vote
of Security Holders.

Not applicable.

I-22



---



##### 



PART II

ITEM 5.     Market
for Registrants Common Equity and Related Stockholder
Matters.

The information under Common Share Prices
and Volumes, Shareholder Information 
Ownership,  Dividends and 11 Year
Report in the registrants 2001 Annual Report, filed
as Exhibit 13, is incorporated herein by reference.

Dividends paid to U.S. holders of Common
Shares, who do not use the shares in carrying on a business in
Canada, will be subject to a Canadian withholding tax under the
Income Tax Act. Under the Canada-U.S. Income Tax Convention
(1980) (the Convention), the rate of withholding is
generally reduced to 15 percent. Subject to certain limitations,
the Canadian withholding tax will be treated as a foreign income
tax that can generally be claimed as a deduction from income or
as a credit against the U.S. income tax liability of the
holder. Holders will generally not be subject to tax under the
Income Tax Act with respect to any gain realized from a
disposition of Common Shares.

ITEM 6.     Selected
Financial Data.

The information under 11 Year Report
in the registrants 2001 Annual Report, filed as
Exhibit 13, is incorporated herein by reference.

ITEM
7.     Managements Discussion and
Analysis of Financial Condition and Results
of Operations.

The information under Managements
Discussion & Analysis of Financial Condition and
Results of Operations in the registrants 2001 Annual
Report, filed as Exhibit 13, is incorporated herein
by reference.

ITEM 7A     Risks
Associated with Financial Instruments.

The Companys nitrogen operations are
significantly affected by the price of natural gas. The Company
employs derivative commodity instruments related to a portion of
its natural gas requirements (primarily futures, swaps and
options) for the purpose of managing its exposure to commodity
price risk in the purchase of natural gas. The Company does not
employ these instruments for trading purposes. Changes in the
market value of these derivative instruments have a high
correlation to changes in the spot price of natural gas. Gains
or losses arising from settled hedging transactions are deferred
as a component of inventory until the product containing the
hedged item is sold. Changes in the market value of open hedging
transactions are not recognized as they generally relate to
changes in the spot price of anticipated natural
gas purchases.

A sensitivity analysis has been prepared to
estimate the Companys market risk exposure arising from
derivative commodity instruments. The fair value of such
instruments is calculated by valuing each position using quoted
market prices. Market risk is estimated as the potential loss in
fair value resulting from hypothetical 10 percent adverse
change in such prices. The results of this analysis indicate
that as of December 31, 2001, the Companys estimated
derivative commodity instruments market risk exposure was
$21.7 million (2000  $49.6 million). Actual
results may differ from the estimate. Changes in the fair value
of such derivative instruments, with maturities in 2002 through
2006, will generally relate to changes in the spot price of
anticipated natural gas purchases.

The Company also enters into forward foreign
exchange contracts for the sole purpose of limiting its exposure
to exchange rate fluctuations relating to certain trade
accounts. Gains or losses resulting from foreign exchange
contracts are recognized monthly and are included in
other income.

ITEM 8.     Financial
Statements and Supplementary Data.

The Consolidated Financial Statements contained
in the registrants 2001 Annual Report, filed as
Exhibit 13, are incorporated herein by reference.

ITEM 9.     Changes
In and Disagreements With Accountants on Accounting and
Financial Disclosure.

Not applicable.

II-1



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##### 



PART III

ITEM
10.     Directors and Executive
Officers of the Registrant.

The information under Election of
Directors in the 2002 Proxy Circular, attached as
Exhibit 99, is incorporated herein by reference.
Information concerning executive officers is set forth under
Executive Officers of the Company in Part I.

ITEM
11.     Executive
Compensation.

The information under Executive
Compensation in the 2002 Proxy Circular, attached as
Exhibit 99, is incorporated herein by reference. Each
incorporation by reference shall be deemed not to include the
information referred to in Item 402(a)(8) of
Regulation S-K.

ITEM 12.     Security
Ownership of Certain Beneficial Owners and Management.

The information under Ownership of
Shares and Election of Directors in the 2002
Proxy Circular, attached as Exhibit 99, is incorporated
herein by reference.

ITEM 13.     Certain
Relationships and Related Transactions.

The information under Election of
Directors and Executive Compensation in the
2002 Proxy Circular, attached as Exhibit 99, is
incorporated herein by reference.

III-1



---



##### 



PART IV

ITEM
14.     Exhibits, Financial Statement
Schedules, and Reports on Form 8-K.

(a) List of Documents Filed as Part of this
Report

1.   Consolidated Financial
Statements in Annual Report

|                                                                |  |  |       | 
|--------------------------------------------------------------- |  |  | ----- | 
|Auditors Report                                                |  |  | 42    | 
|Consolidated Statements of Financial Position                   |  |  | 43    | 
|Consolidated Statements of Income and Retained
        Earnings |  |  | 44    | 
|Consolidated Statements of Cash Flow                            |  |  | 45    | 
|Notes to the Consolidated Financial Statements                  |  |  | 46-62 | 

2.   Schedules

All Schedules are omitted because the required
information is inapplicable or it is presented in the
Consolidated Financial Statements.

3.   Exhibits

|        |      |                         |  |                                                                                                                                                                                                                                                                                                                 
|------- | ---- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                        
|Number  |      | Description of Document
|        |      |                        
|        | 3(a) |                         |  | Restated Articles of Incorporation of the
        registrant dated October 31, 1989, as amended May 11,
        1995, incorporated by reference to Exhibit 3(i) to the
        registrants report on Form 10-K for the year ended
        December 31, 1995 (the 1995 Form 10-K).                            
|        | 3(b) |                         |  | Bylaws of the registrant dated March 2,
        1995, incorporated by reference to Exhibit 3(ii) to the
        1995 Form 10-K.                                                                                                                                                                                 
|        | 4(a) |                         |  | Term Credit Agreement between The Bank of Nova
        Scotia and other financial institutions and the registrant dated
        September 25, 2001, incorporated by reference to
        Exhibit 4(a) to the registrants report on
        Form 10-Q for the quarterly period ended September 30,
        2001.
|        | 4(b) |                         |  | Indenture dated as of June 16, 1997, between
        the registrant and The Bank of Nova Scotia Trust Company of
        New York, incorporated by reference to Exhibit 4(a) to
        the registrants report on Form 8-K dated
        June 18, 1997.                                                        

The registrant hereby undertakes to file with the
Securities and Exchange Commission, upon request, copies of any
constituent instruments defining the rights of holders of
long-term debt of the registrant or its subsidiaries that have
not been filed herewith because the amounts represented thereby
are less than 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis.

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ----- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
        between Central Canada Potash, Division of Noranda, Inc.,
        Cominco Ltd., International Minerals and Chemical Corporation
        (Canada) Limited, PCS Sales and Texasgulf Inc.,
        incorporated by reference to Exhibit 10(f) to the F-1
        Registration Statement.                                                                                                                                                   
|        | 10(b) |                         |  | Canpotex Limited Shareholders Seventh Memorandum
        of Agreement effective April 21, 1978, between Central
        Canada Potash, Division of Noranda Inc., Cominco Ltd.,
        International Minerals and Chemical Corporation (Canada)
        Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
        amended by Canpotex S & P amending agreement dated
        November 4, 1987, incorporated by reference to
        Exhibit 10(g) to the F-1 Registration Statement.
|        | 10(c) |                         |  | Producer Agreement dated April 21, 1978,
        between Canpotex Limited and PCS Sales, incorporated by
        reference to Exhibit 10(h) to the F-1 Registration
        Statement.                                                                                                                                                                                                                                                                                                       

IV-1



---



##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | ----- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(d) |                         |  | Canpotex/PCS Amending Agreement, dated with
	effect October 1, 1992, incorporated by reference to
	Exhibit 10(f) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 10(e) |                         |  | Canpotex PCA Collateral Withdrawing/PCS Amending
	Agreement, dated with effect October 7, 1993, incorporated
	by reference to Exhibit 10(g) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 10(f) |                         |  | Canpotex Producer Agreement amending agreement
	dated effective January 1, 1999, incorporated by reference
	to Exhibit 10(f) of the registrants report on
	Form 10-K for the year ended December 31, 2000 (the
	2000 Form 10-K).                                                                                                                                                                                                                                                                                                                                   
|        | 10(g) |                         |  | Agreement of Limited Partnership of Arcadian
	Fertilizer, L.P. dated as of March 3, 1992 (form), and
	the related Certificate of Limited Partnership of Arcadian
	Fertilizer, L.P., filed with the Secretary of State of the
	State of Delaware on March 3, 1992 (incorporated by
	reference to Exhibits 3.1 and 3.2 to Arcadian Partners
	L.P.s Registration Statement on Form S-1 (File
	No. 33-45828)).                                                                                                                                                           
|        | 10(h) |                         |  | Amendment to Agreement of Limited Partnership of
	Arcadian Fertilizer, L.P. and related Certificates of
	Limited Partnership of Arcadian Fertilizer, L.P. filed with
	the Secretary of State of the State of Delaware on March 6,
	1997 and November 26, 1997, incorporated by reference to
	Exhibit 10(f) to the registrants report on
	Form 10-K for the year ended December 31, 1998 (the
	1998 Form 10-K).                                                                                                                                                     
|        | 10(i) |                         |  | Geismar Complex Services Agreement dated
	June 4, 1984, between Honeywell International, Inc. and
	Arcadian Corporation, incorporated by reference to
	Exhibit 10.4 to Arcadian Corporations Registration
	Statement on Form S-1 (File No. 33-34357).                                                                                                                                                                                                                                                                                                                
|        | 10(j) |                         |  | Esterhazy Restated Mining and Processing
	Agreement dated January 31, 1978, between International
	Minerals & Chemical Corporation (Canada) Limited and
	the registrants predecessor, incorporated by reference to
	Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                                                                                                                                 
|        | 10(k) |                         |  | Agreement dated December 21, 1990, between
	International Minerals & Chemical Corporation (Canada)
	Limited and the registrant, amending the Esterhazy Restated
	Mining and Processing Agreement dated January 31, 1978,
	incorporated by reference to Exhibit 10(p) to the
	registrants report on Form 10-K for the year ended
	December 31, 1990.                                                                                                                                                                                                                  
|        | 10(l) |                         |  | Agreement effective August 27, 1998, between
	International Minerals & Chemical (Canada) Global
	Limited and the registrant, amending the Esterhazy Restated
	Mining and Processing Agreement dated January 31, 1978 (as
	amended), incorporated by reference to Exhibit 10(l) to the
	1998 Form 10-K.                                                                                                                                                                                                                                                                
|        | 10(m) |                         |  | Agreement effective August 31, 1998, among
	International Minerals & Chemical (Canada) Global
	Limited, International Minerals & Chemical (Canada)
	Limited Partnership and the registrant assigning the interest in
	the Esterhazy Restated Mining and Processing Agreement dated
	January 31, 1978 (as amended) held by International
	Minerals & Chemical (Canada) Global Limited to
	International Minerals & Chemical (Canada) Limited
	Partnership, incorporated by reference to Exhibit 10(m) to
	the 1998 Form 10-K.                                          
|        | 10(n) |                         |  | Operating Agreement dated May 11, 1993,
	between BP Chemicals Inc. and Arcadian Ohio, L.P., as
	amended by the First Amendment to the Operating Agreement dated
	as of November 20, 1995, between BP Chemicals Inc. and
	Arcadian Ohio, L.P. (First Amendment), incorporated
	by reference to Exhibit 10.2 to Arcadian Partners
	L.P.s current report on Form 8-K for the report event
	dated May 11, 1993, except for the First Amendment which is
	incorporated by reference to Arcadian Corporations report
	on Form 10-K for the year ended December 31, 1995.
|        | 10(o) |                         |  | Second Amendment to Operating Agreement between
	BP Chemicals, Inc. and Arcadian Ohio, L.P., dated as of
	November 25, 1996, incorporated by reference to
	Exhibit 10(k) of the registrants report on
	Form 10-K for the year ended December 31, 1997 (the
	1997 Form 10-K).                                                                                                                                                                                                                                                                                       

IV-2



---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                                             
|------- | ------ | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|        | 10(p)  |                         |  | Manufacturing Support Agreement dated
	May 11, 1993, between BP Chemicals Inc. and Arcadian
	Ohio, L.P., incorporated by reference to Exhibit 10.3 to
	Arcadian Partners L.P.s current report on Form 8-K
	for the report event dated May 11, 1993.                                                                        
|        | 10(q)  |                         |  | First Amendment to Manufacturing Support
	Agreement between BP Chemicals, Inc. and Arcadian Ohio,
	L.P., dated as of November 25, 1996, incorporated by
	reference to Exhibit 10(l) to the 1997 Form 10-K.                                                                                                                  
|        | 10(r)  |                         |  | Master Termination Agreement dated as of
	May 23, 2001, between Trinidad Ammonia Company, Limited
	Partnership and PCS Nitrogen Fertilizer, L.P., incorporated
	by reference to Exhibit 10(x) to the registrants
	report on Form 10-Q for the quarterly period ended
	June 30, 2001 (the Second Quarter 2001
	Form 10-Q).
|        | 10(s)  |                         |  | Master Termination Agreement dated as of
	May 23, 2001, between Nitrogen Leasing Company, Limited
	Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
	reference to Exhibit 10(y) to the Second Quarter 2001
	Form 10-Q.                                                                                        
|        | 10(t)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
	Option Plan  Directors, as amended January 23,
	2001, incorporated by reference to Exhibit 10(y) to the
	Second Quarter 2001 Form 10-Q.                                                                                                                                     
|        | 10(u)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
	Option Plan  Officers and Employees, as amended
	January 23, 2001, incorporated by reference to
	Exhibit 10(aa) to the 2000 Form 10-K.                                                                                                                                      
|        | 10(v)  |                         |  | Short-Term Incentive Plan of the registrant
	effective January 2000, incorporated by reference to
	Exhibit 10(z) to the registrants report on
	Form 10Q for the quarterly period ended March 31, 2000
	(the First Quarter 2000 Form 10-Q).                                                                               
|        | 10(w)  |                         |  | Long-Term Incentive Plan of the registrant
	effective January 2000, incorporated by reference to
	Exhibit 10(aa) to the Second Quarter 2000 Form 10-Q.                                                                                                                                                                      
|        | 10(x)  |                         |  | Resolution and Forms of Agreement for
	Supplemental Retirement Income Plan, for officers and key
	employees of the registrant, incorporated by reference to
	Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                           
|        | 10(y)  |                         |  | Amending Resolution and revised forms of
	agreement regarding Supplemental Retirement Income Plan of the
	registrant, incorporated by reference to Exhibit 10(x) to
	the registrants report on Form 10-Q for the quarterly
	period ended June 30, 1996.                                                                    
|        | 10(z)  |                         |  | Amended and restated Supplemental Retirement
	Income Plan of the registrant and text of amendment to existing
	supplemental income plan agreements, incorporated by reference
	to Exhibit (mm) to the Third Quarter 2000 Form 10-Q.                                                                                         
|        | 10(aa) |                         |  | Supplemental Retirement Benefits Plan, for
	eligible employees of PCS Phosphate Company, Inc.,
	incorporated by reference to Exhibit 10(g) to the 1995
	Form 10-K.                                                                                                                                                          
|        | 10(bb) |                         |  | Forms of Agreement dated December 30, 1994,
	between the registrant and certain officers of the registrant,
	concerning a change in control of the registrant, incorporated
	by reference to Exhibit 10(p) to the 1995 Form 10-K.                                                                                           
|        | 10(cc) |                         |  | Form of Agreement of Indemnification dated
	August 8, 1995, between the registrant and certain officers
	and directors of the registrant, incorporated by reference to
	Exhibit 10(q) to the 1995 Form 10-K.                                                                                                                
|        | 10(dd) |                         |  | Resolution and Form of Agreement of
	Indemnification dated January 24, 2001, incorporated by
	reference to Exhibit 10(ii) to the 2000 Form 10-K.                                                                                                                                                                            
|        | 10(ee) |                         |  | Chief Executive Officer Medical and Dental Plan,
	incorporated by reference to Exhibit 10(jj) to the 2000
	Form 10-K.                                                                                                                                                                                                       
|        | 10(ff) |                         |  | Second Amended and Restated Membership Agreement
	dated January 1, 1995, among Phosphate Chemicals Export
	Association, Inc. and members of such association, including
	Texasgulf Inc., incorporated by reference to Exhibit 10(t)
	to the 1995 Form 10-K.                                                                 

IV-3



---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                               
|------- | ------ | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|        | 10(gg) |                         |  | International Agency Agreement dated
	January 1, 1995, between Phosphate Chemicals Export
	Association, Inc. and Texasgulf Inc. establishing Texasgulf Inc.
	as exclusive marketing agent for such associations wet
	phosphatic materials, incorporated by reference to
	Exhibit 10(u) to the 1995 Form 10-K.
|        | 10(hh) |                         |  | Royalty Agreement dated October 7, 1993, by
	and between the registrant and Rio Algom Limited, incorporated
	by reference to Exhibit 10(x) to the 1995 Form 10-K.                                                                                                                                             
|        | 10(ii) |                         |  | Form of Note relating to the Companys
	offering of $600,000,000 principal amount of 7 3/4% Notes
	due on May 31, 2011, incorporated by reference to
	Exhibit 4 to the registrants report on Form 8-K
	dated May 17, 2001.                                                                                   
|        | 10(jj) |                         |  | Deferred Share Unit Plan for Non-Employee
	Directors, incorporated by reference to Exhibit 4.1 to the
	registrants Form S-8 (File No. 333-75742) filed
	December 21, 2001.                                                                                                                                   
|        | 11     |                         |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                                                                                                
|        | 12     |                         |  | Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                             
|        | 13     |                         |  | 2001 Annual Report                                                                                                                                                                                                                                                                                            
|        | 21     |                         |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                
|        | 23     |                         |  | Consent of Deloitte & Touche LLP                                                                                                                                                                                                                                                                              
|        | 99     |                         |  | 2002 Notice of Meeting, Proxy Circular and Form
	of Proxy                                                                                                                                                                                                                                                     



|    |                    
|--- | -------------------
|(b) | Reports on Form 8-K

On December 21, 2001 the Company filed a
current report on Form 8-K providing a description of the
Companys capital stock.

Copies of Exhibits to the Form 10-K may be
obtained upon request from the Corporate Secretary, Potash
Corporation of Saskatchewan Inc., Suite 500, 122 First
Avenue South, Saskatoon, Saskatchewan S7K 7G3, Canada. The
Company reserves the right to recover its reasonable expenses in
providing copies of the Exhibits, such expenses not to exceed
$.25 per page.

IV-4



---



##### 



SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| |  |                                         |  |                                    
| |  | --------------------------------------- |  | -----------------------------------
| |  | POTASH CORPORATION OF SASKATCHEWAN INC.
|
| |  | By:                                     |  | /s/ WILLIAM J. DOYLE               
| |  |                                         |  |                                    
| |  |                                         |  | William J. Doyle                   
| |  |                                         |  | President & Chief Executive Officer
| |  |                                         |  | March 27, 2002                     

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|                                         |  |                                                               |  |               
|---------------------------------------- |  | ------------------------------------------------------------- |  | --------------
|Signature                                |  | Title                                                         |  | Date          
|                                         |  |                                                               |  |               
|/s/ DONALD E. PHILLIPSDonald E. Phillips |  | Chairman of the Board                                         |  | March 27, 2002
|                                        
|/s/ WAYNE R. BROWNLEEWayne R. Brownlee   |  | Senior Vice President, Treasurer and Chief
	Financial Officer |  | March 27, 2002
|                                        
|/s/ WILLIAM J. DOYLEWilliam J. Doyle     |  | President and Chief Executive Officer                         |  | March 27, 2002
|                                        
|/s/ FREDERICK J. BLESIFrederick J. Blesi |  | Director                                                      |  | March 27, 2002
|                                        
|/s/ DOUGLAS J. BOURNEDouglas J. Bourne   |  | Director                                                      |  | March 27, 2002
|                                        
|/s/ DALLAS J. HOWEDallas J. Howe         |  | Director                                                      |  | March 27, 2002
|                                        
|/s/ JEFFREY J. MCCAIGJeffrey J. McCaig   |  | Director                                                      |  | March 27, 2002
|                                        
|/s/ MARY MOGFORDMary Mogford             |  | Director                                                      |  | March 27, 2002
|                                        
|/s/ PAUL J. SCHOENHALSPaul J. Schoenhals |  | Director                                                      |  | March 27, 2002



---



##### 



|                                                       |  |          |  |               
|------------------------------------------------------ |  | -------- |  | --------------
|Signature                                              |  | Title    |  | Date          
|                                                       |  |          |  |               
|/s/ E. ROBERT STROMBERG, Q.C.E. Robert Stromberg, Q.C. |  | Director |  | March 27, 2002
|                                                      
|/s/ JACK G. VICQJack G. Vicq                           |  | Director |  | March 27, 2002
|                                                      
|/s/ BARRIE A. WIGMOREBarrie A. Wigmore                 |  | Director |  | March 27, 2002
|                                                      
|/s/ THOMAS J. WRIGHTThomas J. Wright                   |  | Director |  | March 27, 2002



---



##### 



EXHIBIT INDEX

|        |      |                         |  |                                                                                                                                                                                                                                                                                                                 
|------- | ---- | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |                        
|Number  |      | Description of Document
|        |      |                        
|        | 3(a) |                         |  | Restated Articles of Incorporation of the
        registrant dated October 31, 1989, as amended May 11,
        1995, incorporated by reference to Exhibit 3(i) to the
        registrants report on Form 10-K for the year ended
        December 31, 1995 (the 1995 Form 10-K).                            
|        | 3(b) |                         |  | Bylaws of the registrant dated March 2,
        1995, incorporated by reference to Exhibit 3(ii) to the
        1995 Form 10-K.                                                                                                                                                                                 
|        | 4(a) |                         |  | Term Credit Agreement between The Bank of Nova
        Scotia and other financial institutions and the registrant dated
        September 25, 2001, incorporated by reference to
        Exhibit 4(a) to the registrants report on
        Form 10-Q for the quarterly period ended September 30,
        2001.
|        | 4(b) |                         |  | Indenture dated as of June 16, 1997, between
        the registrant and The Bank of Nova Scotia Trust Company of
        New York, incorporated by reference to Exhibit 4(a) to
        the registrants report on Form 8-K dated
        June 18, 1997.                                                        

The registrant hereby undertakes to file with the
Securities and Exchange Commission, upon request, copies of any
constituent instruments defining the rights of holders of
long-term debt of the registrant or its subsidiaries that have
not been filed herewith because the amounts represented thereby
are less than 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis.

|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ----- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(a) |                         |  | Sixth Voting Agreement dated April 22, 1978,
        between Central Canada Potash, Division of Noranda, Inc.,
        Cominco Ltd., International Minerals and Chemical Corporation
        (Canada) Limited, PCS Sales and Texasgulf Inc.,
        incorporated by reference to Exhibit 10(f) to the F-1
        Registration Statement.                                                                                                                                                   
|        | 10(b) |                         |  | Canpotex Limited Shareholders Seventh Memorandum
        of Agreement effective April 21, 1978, between Central
        Canada Potash, Division of Noranda Inc., Cominco Ltd.,
        International Minerals and Chemical Corporation (Canada)
        Limited, PCS Sales, Texasgulf Inc. and Canpotex Limited as
        amended by Canpotex S & P amending agreement dated
        November 4, 1987, incorporated by reference to
        Exhibit 10(g) to the F-1 Registration Statement.
|        | 10(c) |                         |  | Producer Agreement dated April 21, 1978,
        between Canpotex Limited and PCS Sales, incorporated by
        reference to Exhibit 10(h) to the F-1 Registration
        Statement.                                                                                                                                                                                                                                                                                                       





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##### 



|        |       |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | ----- | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |                        
|Number  |       | Description of Document
|        |       |                        
|        | 10(d) |                         |  | Canpotex/PCS Amending Agreement, dated with
        effect October 1, 1992, incorporated by reference to
        Exhibit 10(f) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 10(e) |                         |  | Canpotex PCA Collateral Withdrawing/PCS Amending
        Agreement, dated with effect October 7, 1993, incorporated
        by reference to Exhibit 10(g) to the 1995 Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        | 10(f) |                         |  | Canpotex Producer Agreement amending agreement
        dated effective January 1, 1999, incorporated by reference
        to Exhibit 10(f) of the registrants report on
        Form 10-K for the year ended December 31, 2000 (the
        2000 Form 10-K).                                                                                                                                                                                                                                                                                                                                                                      
|        | 10(g) |                         |  | Agreement of Limited Partnership of Arcadian
        Fertilizer, L.P. dated as of March 3, 1992 (form), and
        the related Certificate of Limited Partnership of Arcadian
        Fertilizer, L.P., filed with the Secretary of State of the
        State of Delaware on March 3, 1992 (incorporated by
        reference to Exhibits 3.1 and 3.2 to Arcadian Partners
        L.P.s Registration Statement on Form S-1 (File
        No. 33-45828)).                                                                                                                                                                         
|        | 10(h) |                         |  | Amendment to Agreement of Limited Partnership of
        Arcadian Fertilizer, L.P. and related Certificates of
        Limited Partnership of Arcadian Fertilizer, L.P. filed with
        the Secretary of State of the State of Delaware on March 6,
        1997 and November 26, 1997, incorporated by reference to
        Exhibit 10(f) to the registrants report on
        Form 10-K for the year ended December 31, 1998 (the
        1998 Form 10-K).                                                                                                                                                                   
|        | 10(i) |                         |  | Geismar Complex Services Agreement dated
        June 4, 1984, between Honeywell International, Inc. and
        Arcadian Corporation, incorporated by reference to
        Exhibit 10.4 to Arcadian Corporations Registration
        Statement on Form S-1 (File No. 33-34357).                                                                                                                                                                                                                                                                                                                                                   
|        | 10(j) |                         |  | Esterhazy Restated Mining and Processing
        Agreement dated January 31, 1978, between International
        Minerals & Chemical Corporation (Canada) Limited and
        the registrants predecessor, incorporated by reference to
        Exhibit 10(e) to the F-1 Registration Statement.                                                                                                                                                                                                                                                                                                                                    
|        | 10(k) |                         |  | Agreement dated December 21, 1990, between
        International Minerals & Chemical Corporation (Canada)
        Limited and the registrant, amending the Esterhazy Restated
        Mining and Processing Agreement dated January 31, 1978,
        incorporated by reference to Exhibit 10(p) to the
        registrants report on Form 10-K for the year ended
        December 31, 1990.                                                                                                                                                                                                                                       
|        | 10(l) |                         |  | Agreement effective August 27, 1998, between
        International Minerals & Chemical (Canada) Global
        Limited and the registrant, amending the Esterhazy Restated
        Mining and Processing Agreement dated January 31, 1978 (as
        amended), incorporated by reference to Exhibit 10(l) to the
        1998 Form 10-K.                                                                                                                                                                                                                                                                                            
|        | 10(m) |                         |  | Agreement effective August 31, 1998, among
        International Minerals & Chemical (Canada) Global
        Limited, International Minerals & Chemical (Canada)
        Limited Partnership and the registrant assigning the interest in
        the Esterhazy Restated Mining and Processing Agreement dated
        January 31, 1978 (as amended) held by International
        Minerals & Chemical (Canada) Global Limited to
        International Minerals & Chemical (Canada) Limited
        Partnership, incorporated by reference to Exhibit 10(m) to
        the 1998 Form 10-K.                                          
|        | 10(n) |                         |  | Operating Agreement dated May 11, 1993,
        between BP Chemicals Inc. and Arcadian Ohio, L.P., as
        amended by the First Amendment to the Operating Agreement dated
        as of November 20, 1995, between BP Chemicals Inc. and
        Arcadian Ohio, L.P. (First Amendment), incorporated
        by reference to Exhibit 10.2 to Arcadian Partners
        L.P.s current report on Form 8-K for the report event
        dated May 11, 1993, except for the First Amendment which is
        incorporated by reference to Arcadian Corporations report
        on Form 10-K for the year ended December 31, 1995.
|        | 10(o) |                         |  | Second Amendment to Operating Agreement between
        BP Chemicals, Inc. and Arcadian Ohio, L.P., dated as of
        November 25, 1996, incorporated by reference to
        Exhibit 10(k) of the registrants report on
        Form 10-K for the year ended December 31, 1997 (the
        1997 Form 10-K).                                                                                                                                                                                                                                                                                                                   





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##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                                                                                       
|------- | ------ | ----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|        | 10(p)  |                         |  | Manufacturing Support Agreement dated
        May 11, 1993, between BP Chemicals Inc. and Arcadian
        Ohio, L.P., incorporated by reference to Exhibit 10.3 to
        Arcadian Partners L.P.s current report on Form 8-K
        for the report event dated May 11, 1993.                                                                                      
|        | 10(q)  |                         |  | First Amendment to Manufacturing Support
        Agreement between BP Chemicals, Inc. and Arcadian Ohio,
        L.P., dated as of November 25, 1996, incorporated by
        reference to Exhibit 10(l) to the 1997 Form 10-K.                                                                                                                                       
|        | 10(r)  |                         |  | Master Termination Agreement dated as of
        May 23, 2001, between Trinidad Ammonia Company, Limited
        Partnership and PCS Nitrogen Fertilizer, L.P., incorporated
        by reference to Exhibit 10(x) to the registrants
        report on Form 10-Q for the quarterly period ended
        June 30, 2001 (the Second Quarter 2001
        Form 10-Q).
|        | 10(s)  |                         |  | Master Termination Agreement dated as of
        May 23, 2001, between Nitrogen Leasing Company, Limited
        Partnership and PCS Nitrogen Fertilizer, L.P., incorporated by
        reference to Exhibit 10(y) to the Second Quarter 2001
        Form 10-Q.                                                                                                      
|        | 10(t)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
        Option Plan  Directors, as amended January 23,
        2001, incorporated by reference to Exhibit 10(y) to the
        Second Quarter 2001 Form 10-Q.                                                                                                                                                          
|        | 10(u)  |                         |  | Potash Corporation of Saskatchewan Inc. Stock
        Option Plan  Officers and Employees, as amended
        January 23, 2001, incorporated by reference to
        Exhibit 10(aa) to the 2000 Form 10-K.                                                                                                                                                           
|        | 10(v)  |                         |  | Short-Term Incentive Plan of the registrant
        effective January 2000, incorporated by reference to
        Exhibit 10(z) to the registrants report on
        Form 10Q for the quarterly period ended March 31, 2000
        (the First Quarter 2000 Form 10-Q).                                                                                             
|        | 10(w)  |                         |  | Long-Term Incentive Plan of the registrant
        effective January 2000, incorporated by reference to
        Exhibit 10(aa) to the Second Quarter 2000 Form 10-Q.                                                                                                                                                                                                  
|        | 10(x)  |                         |  | Resolution and Forms of Agreement for
        Supplemental Retirement Income Plan, for officers and key
        employees of the registrant, incorporated by reference to
        Exhibit 10(o) to the 1995 Form 10-K.                                                                                                                                                
|        | 10(y)  |                         |  | Amending Resolution and revised forms of
        agreement regarding Supplemental Retirement Income Plan of the
        registrant, incorporated by reference to Exhibit 10(x) to
        the registrants report on Form 10-Q for the quarterly
        period ended June 30, 1996.                                                                                  
|        | 10(z)  |                         |  | Amended and restated Supplemental Retirement
        Income Plan of the registrant and text of amendment to existing
        supplemental income plan agreements, incorporated by reference
        to Exhibit (mm) to the Third Quarter 2000 Form 10-Q.                                                                                                              
|        | 10(aa) |                         |  | Supplemental Retirement Benefits Plan, for
        eligible employees of PCS Phosphate Company, Inc.,
        incorporated by reference to Exhibit 10(g) to the 1995
        Form 10-K.                                                                                                                                                                               
|        | 10(bb) |                         |  | Forms of Agreement dated December 30, 1994,
        between the registrant and certain officers of the registrant,
        concerning a change in control of the registrant, incorporated
        by reference to Exhibit 10(p) to the 1995 Form 10-K.                                                                                                                
|        | 10(cc) |                         |  | Form of Agreement of Indemnification dated
        August 8, 1995, between the registrant and certain officers
        and directors of the registrant, incorporated by reference to
        Exhibit 10(q) to the 1995 Form 10-K.                                                                                                                                     
|        | 10(dd) |                         |  | Resolution and Form of Agreement of
        Indemnification dated January 24, 2001, incorporated by
        reference to Exhibit 10(ii) to the 2000 Form 10-K.                                                                                                                                                                                                        
|        | 10(ee) |                         |  | Chief Executive Officer Medical and Dental Plan,
        incorporated by reference to Exhibit 10(jj) to the 2000
        Form 10-K.                                                                                                                                                                                                                                   
|        | 10(ff) |                         |  | Second Amended and Restated Membership Agreement
        dated January 1, 1995, among Phosphate Chemicals Export
        Association, Inc. and members of such association, including
        Texasgulf Inc., incorporated by reference to Exhibit 10(t)
        to the 1995 Form 10-K.                                                                               





---



##### 



|        |        |                         |  |                                                                                                                                                                                                                                                                                                                                                  
|------- | ------ | ----------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |        |                        
|Number  |        | Description of Document
|        |        |                        
|        | 10(gg) |                         |  | International Agency Agreement dated
        January 1, 1995, between Phosphate Chemicals Export
        Association, Inc. and Texasgulf Inc. establishing Texasgulf Inc.
        as exclusive marketing agent for such associations wet
        phosphatic materials, incorporated by reference to
        Exhibit 10(u) to the 1995 Form 10-K.
|        | 10(hh) |                         |  | Royalty Agreement dated October 7, 1993, by
        and between the registrant and Rio Algom Limited, incorporated
        by reference to Exhibit 10(x) to the 1995 Form 10-K.                                                                                                                                                                  
|        | 10(ii) |                         |  | Form of Note relating to the Companys
        offering of $600,000,000 principal amount of 7 3/4% Notes
        due on May 31, 2011, incorporated by reference to
        Exhibit 4 to the registrants report on Form 8-K
        dated May 17, 2001.                                                                                          
|        | 10(jj) |                         |  | Deferred Share Unit Plan for Non-Employee
        Directors, incorporated by reference to Exhibit 4.1 to the
        registrants Form S-8 (File No. 333-75742) filed
        December 21, 2001.                                                                                                                                                 
|        | 11     |                         |  | Statement re Computation of Per Share Earnings                                                                                                                                                                                                                                                                                                   
|        | 12     |                         |  | Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                
|        | 13     |                         |  | 2001 Annual Report                                                                                                                                                                                                                                                                                                                               
|        | 21     |                         |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                   
|        | 23     |                         |  | Consent of Deloitte & Touche LLP                                                                                                                                                                                                                                                                                                                 
|        | 99     |                         |  | 2002 Notice of Meeting, Proxy Circular and Form
        of Proxy