UPDATE 1-Potash Corp says expansion continues amid strike

WINNIPEG, Manitoba, Aug 8 (Reuters) - Potash Corp of Saskatchewan (POT.TO: Quote, Profile, Research, Stock Buzz) expects that work on expansion of its Canadian potash mines will continue despite a strike at three of the mines, spokesman Bill Johnson said on Friday.

"I expect that there will be some short-term disruptions in the expansion, but we expect that those expansions will continue," Johnson said in a telephone interview.

Potash Corp, the world's largest fertilizer company, plans to spend C$6.78 billion ($6.34 billion) to boost capacity by 76 percent to 18 million tonnes of potash by 2012 to help meet surging demand for the mineral at a time of high prices and food shortages. Potash can be used as both a fertilizer by itself or as a fertilizer ingredient.

About 500 production workers at three of its mines are on strike, and United Steelworkers officials have said they expect trade unions working on expansion projects at the sites will not cross their picket lines.

Potash Corp is spending C$110 million at its Patience Lake mine on an expansion slated for completion later this year.

The company has planned C$1.11 billion for the Cory mine and C$350 million on the Allan mine, with work to be completed by 2012.

The union expects the strike will shut down production at the three mines, which account for about 6 percent of world potash capacity at a time when suppliers are essentially sold out of the fertilizer.

But Johnson said the company is assessing its contingency plans, and he could not comment on how its production would be curtailed.

"We'll assess what our supply looks like, but it would be my hope that this (strike) would not have an impact on our current (sales) commitments," he said.

He said the company had not withdrawn offers or stepped back from making sales, although he noted that it has not been aggressively pursuing new sales because demand has exceeded supplies.

Johnson also said it was too early to tell what impact the strike would have on Canpotex, the export marketing consortium for Potash Corp, Mosaic Co (MOS.N: Quote, Profile, Research, Stock Buzz) and Agrium Inc (AGU.TO: Quote, Profile, Research, Stock Buzz). (Reporting by Roberta Rampton; Editing by Peter Galloway)