Poor demand for fertilizer caused by unprecedented wet weather in the American Midwest has prompted American fertilizer giant Mosaic to temporarily suspend potash production at its mine near Colonsay, Sask.
The Minnesota-based company announced plans earlier this week (Aug. 7) to temporarily curtail production at Colonsay, effective Sept. 10.
The decision means that close to 350 unionized hourly workers will be out of work as of Sept. 9.
Colonsay, population 475, is located about a half hour’s drive east of Saskatoon.
“We’ve experienced a North American spring season that was wetter and later than any in recorded history,” said Mosaic president and chief executive officer Joc O’Rourke in a news release.
“While our potash and Mosaic fertilizer businesses continued to perform well, weakness in the phosphates market negatively impacted second quarter results. Moving forward, strong price increases in grains together with depleted soil nutrients in North America are expected to drive fertilizer applications significantly higher this fall.”
“The actions we’ve taken to reshape our business, including the … curtailment of potash production at Colonsay, are expected to increase our operating leverage to the anticipated strong market fundamentals in the second half of 2019 and beyond.”
In an Aug. 7 email to The Western Producer, Mosaic spokesperson Sarah Fedorchuk the company has issued temporary lay of notices to 395 employees.
More than 340 workers will be out of work effective Sept. 9.
The company anticipates that another 50 or so will remain on the job beyond Sept. 9, “keeping the site on standby should market conditions change for the better.”
About 133 salaried employees will also remain on the payroll.
“We believe that idling Colonsay will allow us to reduce our current inventory levels, lower our cash costs of production and provide a buffer to any delay in new potash contract shipments,” Fedorchuk said.
“Our timeline for these employees returning to work completely depends on market conditions…,” she added. “We understand how this decision has impacted our employees and their families .”
This is not the first time production at the Colonsay mine has been suspended due to poor market conditions.
A similar shutdown in the summer of 2016 resulted in nearly 350 temporary layoffs.
Workers affected by the 2016 closure returned to the job about five months later, in early December.