Nutrien CEO anticipates rise in potash production, discounts mine closures

After musing about the possibility of shutting down one or more of its potash mines should fertilizer demand taper off, Nutrien Ltd.’s chief executive now says the newly formed company does not expect that scenario to play out this year.

Earlier this week, Nutrien CEO Chuck Magro told investors the company would “look at all options” if demand falls. While Nutrien needs all six of its mines running in the short term, it will take another look mid-year, Nutrien’s executive vice-president added.

Speaking with reporters in Saskatoon, Magro attempted to soothe concerns about the remarks — which, according to a representative of the organization representing unionized potash miners in the province, likely took a lot of workers off guard.

“You never want to take any option off the table,” said Magro, who took the helm of the agricultural supply giant when it was formed in the Jan. 1 merger between Potash Corp. of Saskatchewan Inc. and Agrium Inc.

“I don’t have a (crystal) ball in terms of what’s going to happen when it comes to demand globally. But with what we can see, absolutely not. Our plans are going to be very similar to last year; in fact, we’re going to produce more potash this year than we did last year.”

The Saskatchewan Potash Council has said previously that workers were deeply uncertain about what the merger would bring. Darrin Kruger, who works for the labour organization, said while some uncertainty remains, there is also “cautious optimism.”

While the company telegraphed the possibility of production changes on its earnings call earlier this week, all of its potash sites have hiring freezes in place and few miners are anticipating “immediate” layoffs, Kruger said.

“What hasn’t been determined, or at least hasn’t been shared with the workers, is what everybody’s run rates are going to be,” he said, referring to how much potash each mine produces compared to its stated production capacity.

Before the merger, PotashCorp officials said repeatedly that the company planned to shift production to its Rocanville mine in southeast Saskatchewan, which recently underwent a major expansion and is cheaper to operate than other sites.

Saskatchewan’s newly appointed energy and resources minister, Bronwyn Eyre, was not available for an interview on Thursday. Government spokesman James Parker wrote in an email that the province expects increased potash production in the coming years.

“Nutrien indicated it would continue operations at its six potash mines while it works to ensure efficient production. While we understand there can be temporary mine shut downs, we will continue to urge Nutrien to keep all six mines open,” Parker wrote.

Days after the merger closed, former premier Brad Wall said Nutrien had committed to increase the number of corporate positions it maintained in Saskatchewan by 15 per cent, to around 300.

He said the next premier must be vigilant to ensure that promise is kept.

“We think this is a great area and a great opportunity to add jobs into the community,” Magro told reporters. “We’re working through those plans now. By the time we’re done with all of our plans, we see a net increase … specifically in Saskatoon.”

Wall had previously raised concerns about Magro keeping his permanent residence in Calgary, but the business executive said Thursday that he plans to buy a home in Saskatoon.