Reuters — U.S. fertilizer company Mosaic Co. has laid off 46 unionized workers, or eight per cent of the workforce, at its Colonsay, Sask. potash mine, the company said Friday, as producers struggle with weak demand.
Potash prices have fallen in the past year due to excessive mining capacity and reduced demand in key markets. Dry weather has limited crop production in India and a new Chinese tax and weak economy in Brazil also have hampered sales.
Mosaic’s mine at Colonsay, about 50 km east of Saskatoon, has higher production costs than Mosaic’s other Saskatchewan mines. In September, Mosaic said it would curtail production there due to delayed fertilizer purchases in Brazil and North America.
The cuts to unionized jobs are permanent and due to “current market conditions,” Mosaic representative Sarah Fedorchuk said. They take effect immediately.
“The silver lining behind production cuts and layoffs is that (Mosaic) believes the market is salvageable with some incremental discipline,” Scotiabank analyst Ben Isaacson said in a note to clients. “If anything, we see it as positive.”
Mosaic continues to expand its Esterhazy, Sask. potash mine.
Mosaic shares gained 0.7 per cent to $35.42 on the New York Stock Exchange.
ICL Israel Chemicals’ chief executive on Thursday said China and India were seeking discounts on their next contracts with potash suppliers.
Mosaic, PotashCorp and Agrium sell potash to those markets through their joint company Canpotex Ltd.
— Reporting for Reuters by Rod Nickel in Winnipeg.