Long-term shutdown at Colonsay mine puts 80 out of work

SASKATOON Around 80 salaried employees at Mosaic Co.’s Colonsay mine east of Saskatoon are out of work after the potash mining company signalled its intention to keep the facility off-line “for the foreseeable future.”

The Tampa, Fla.-based company shut down the mine, one of three it operates in Saskatchewan, in August, a decision it attributed to an extremely wet growing season in the American Midwest curbing demand for fertilizer.

That decision resulted in about 350 unionized employees getting pink slips without a recall date; at the time, their union warned the shutdown could be long and encouraged workers to look for other employment.

Mosaic spokeswoman Sarah Fedorchuk said some salaried employees at Colonsay already have moved on to different roles in the company, and 45 unionized workers remain at the site for safety, regulatory and “minimal” maintenance purposes.

“While a difficult decision to make, giving our Colonsay workforce a clear picture of our plans is an important step in allowing them to best prepare for their future,” Fedorchuk said in an emailed statement.

“We will be providing transition services, educational bursaries through a retraining fund to obtain new skills and education, and access to other services, like our Employee Family Assistance Plan.”

She attributed the decision to keep the mine off-line to global market conditions and the facility’s “much higher cost structure.” Saskatchewan potash companies have in recent years shifted production to lower-cost mines where possible.

In a news release, the company said it will incur cash severance charges of between US$15 million and US$20 million.

The mine has produced around 1.5 million tonnes of potash per year since 2016. While a recent expansion project increased that capacity to 2.1 million tonnes, Mosaic said it does not expect to use those tonnes in the foreseeable future.

Despite efforts to reduce costs, however, lower-than-expected demand for potash has made the last year difficult for all three companies that mine it in the province — Mosaic, Nutrien Ltd. and K+S Potash Canada (KSPC).

All three have cut production in recent months.

Mosaic also has undertaken short-term shutdowns at its K1

Giving our Colonsay workforce a clear picture of our plans is an important step in allowing them to best prepare for their future.

and K2 operations near Esterhazy, while KSPC slashed production at its solution mine near Bethune — a decision the company said did not result in layoffs.

Nutrien Ltd. has cut production at three of its mines near Saskatoon. While two came back online late last year after eightweek shutdowns, the company has twice extended the shutdown at its Vanscoy mine.

Saskatchewan’s potash industry employs around 5,000 people and accounts for about five per cent of the province’s roughly $80-billion gross domestic product.