Potash Corporation of Saskatchewan Inc. said Wednesday it would cut 140 jobs at its Cory potash mine and curtail production at two other operations in its home province as it focuses on lower-cost mines amid slumping prices.
The Saskatoon, Saskatchewan-based fertilizer company, which earlier this year agreed to merge with peer Agrium Inc., said it plans to drop production of one type of potash at Cory, lowering the mine’s operational capability by 43% to about 800,000 metric tons of the key fertilizer ingredient.
The job cuts, which include 100 permanent positions and 40 temporary, total about 29% of the mine’s workforce. The mine will continue to employ about 350 workers, Potash said. At the end of September, Potash had more than 5,000 employees overall, including around 2,300 in its Potash operations.
“We are making this decision to optimize production to our lowest cost operations, including Rocanville and other Saskatchewan sites,” Mark Fracchia, president of the company’s PCS Potash operations said in a release. The company’s Rocanville, Saskatchewan, mine has potash production capacity of 3 million tons.
Potash said the Cory cuts, which will be largely effective in February, aren’t expected to hurt the availability or quality of its products.
The company also announced planned production curtailments at two other facilities in early 2017 to help match supply with market demand. It said it would halt production for six weeks starting in January at its Lanigan mine and curtail production for 12 weeks starting in February at its Allan facility.
Additional temporary layoffs will result from the curtailments, Potash said, but specific numbers haven’t yet been determined.
Late last month, Potash reported third-quarter earnings and sales that came in well below year-earlier levels, hurt by a continued slump in fertilizer-nutrient prices. Before those results, the company had already slashed its annual earnings guidance and cut its quarterly dividend for a second time this year.
Potash and Agrium agreed in September to merge in a deal that would create a crop-nutrient giant. The merger, which remains subject to various regulatory approvals, is expected to close in mid-2017.
By Judy McKinnon
Source: Wall Street Journal
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