CALGARY - Agrium Inc. (TSX:AGU), predicting a big rebound in fertilizer demand in 2010, is pressing ahead with expansions to a potash mine in Saskatchewan and construction of a nitrogen plant in Egypt.

The Calgary-based fertilizer giant said Thursday it has made "significant progress" in its efforts to add 750,000 tonnes of potash capacity to its mine in Vanscoy, Sask.

The improvements are expected to boost production of the key crop nutrient to 2.8 million tonnes per year by 2015.

"We believe that global potash demand will start to rebound in 2010 and that brownfield expansions make economic sense, given the world ultimately will need this additional production," Agrium president and CEO Mike Wilson said in a statement.

Final project approval for the expansion is expected in late 2010. Agrium has awarded an engineering, procurement and construction services contract to a joint venture involving major construction firm SNC-Lavalin (TSX:SNC) and PCL Industrial Management Inc. for an undisclosed amount.

Most of the construction work is expected to be completed in 2013 and 2014.

This year was marked by dismal demand for fertilizers, but TSO & Associates analyst Terry Ortslan said there's every reason to believe there will be a "double-digit" uptick in potash consumption globally in 2010.

"When the agricultural sector goes back to its norm in the world, every tonne of capacity will be needed by the potash producers," he said.

On Wednesday, Agrium said it and its partner in an Egyptian nitrogen plant had secured $1.05 billion in financing, allowing them to proceed with construction of the second and third production trains.

Agrium owns a 26 per cent equity interest in the existing MOPCO facility in Damietta, Egypt, which has been in operation since October 2008.

"This is an outstanding opportunity for Agrium to participate in the significant expansion to this world class facility and in an area with long-term, competitively priced gas and prime access to world markets," Wilson said.

He added Agrium is committed to growing across all three of its business units - wholesale, retail and advanced technologies - through "a variety of value added opportunities."

Since early 2009, Agrium has been trying to expand its presence in the United States through its hostile pursuit of Deerfield, Ill.,-based CF Industries Holdings Inc. (NYSE:CF).

"The announcement today in no way diminishes our resolve to proceed with our proposed acquisition of CF Industries Holdings, Inc.," Wilson said.

Its most recent offer of $45 in cash plus one Agrium share for each CF share expires on Friday. CF has dismissed all of Agrium's overtures so far, opting instead to pursue a hostile takeover of Terra Industries Inc. (NYSE:TRA).

Agrium is a major retail supplier of farm products and services in both North and South America and a leading global producer and marketer of fertilizers and industrial chemicals.

Shares in the company were down $1.64 or 2.5 per cent to $64.47 in midday trading on the Toronto Stock Exchange.