CN to invest $35 million in Wisconsin to serve Superior Silica Sands frac sand plant and other producers in future

CHICAGO, Aug. 13, 2012 /PRNewswire/ - CN (TSX: CNR) (NYSE: CNI) and Superior Silica Sands today announced a multi-year agreement to move frac sand from a new processing plant now under construction in northern Wisconsin.

Texas-based Superior Silica Sands is building an 85-acre sand processing plant and rail storage facility adjacent to CN's Barron Subdivision near Poskin, Wis., capable of producing up to 2.4 million tons per year of high-quality frac sand products.

CN this spring launched a $35-million project to restore nearly 40 miles of track between Ladysmith and Barron, Wis. CN will upgrade rail and replace railroad ties, repair culverts and bridges, and restore rail service along the line. The Barron Subdivision will connect to CN's North American rail network at Ladysmith and will be in service later this year.

CN will provide rail service to the new plant, moving frac sand from northern Wisconsin to shale drilling areas across North America, including Western Canada.

Superior Silica Sands President Rick Shearer said: "We are excited to partner with CN on this project, which will open a new supply chain for our customers and allow us to reach new markets across North America. This major expansion allows Superior Silica Sands to realize its business model for dynamic growth."

Jean-Jacques Ruest, CN executive vice-president and chief marketing officer, said: "We look forward to working with Superior Silica Sands. We are investing $35 million to reopen the Barron Subdivision for rail service and to serve Superior Silica Sands and eventually other new frac sand plants on the same Barron Subdivision.

"Over the last three years, CN's frac sand market has grown nearly 70 percent, reaching 35,000 carloads and $100 million in revenue in 2011, and we hope that our end-to-end service focus will help us grow this market to become a $300-million business for CN in the next three-to-five year horizon. With this project, CN welcomes one of the leading frac sand industry producers, Superior Silica Sands, as our newest customer."

Superior Silica Sands broke ground on the processing plant and rail storage yard this month and expects to start production this November. Superior Silica Sands has invested more than $50 million in this frac sand operation, which is expected to bring more than 100 new jobs to the area.

Forward-Looking Statements

Certain information included in this news release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and under Canadian securities laws. CN cautions that, by their nature, these forward-looking statements, including statements relating to the growth of the frac sand market, involve risks, uncertainties and assumptions. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the rail industry to be materially different from the outlook or any future results or performance implied by such statements.

Important risk factors that could affect the forward-looking statements include, but are not limited to, the effects of general economic and business conditions, industry competition, inflation, currency and interest rate fluctuations, changes in fuel prices, legislative and/or regulatory developments, compliance with environmental laws and regulations, actions by regulators, various events which could disrupt operations, including natural events such as severe weather, droughts, floods and earthquakes, labor negotiations and disruptions, environmental claims, uncertainties of investigations, proceedings or other types of claims and litigation, risks and liabilities arising from derailments, and other risks detailed from time to time in reports filed by CN with securities regulators in Canada and the United States. Reference should be made to "Management's Discussion and Analysis" in CN's annual and interim reports, Annual Information Form and Form 40-F filed with Canadian and U.S. securities regulators, available on CN's website, for a summary of major risks.

CN assumes no obligation to update or revise forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable Canadian securities laws. In the event CN does update any forward-looking statement, no inference should be made that CN will make additional updates with respect to that statement, related matters, or any other forward-looking statement.

CN - Canadian National Railway Company and its operating railway subsidiaries - spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. For more information on CN, visit the company's website at www.cn.ca.

SOURCE CN