Nutrien to issue pink slips to 610 amid railway backlog

The world’s largest potash mining company says it is preparing to issue 610 temporary pink slips at two mines near Saskatoon in response to weak railway shipment performance.

Nutrien Ltd. initially confirmed it planned to lay off 1,300 miners, but subsequently said “at this time” it will issue 470 notices at its Vanscoy mine and another 140 at its Allan operation. The company said the layoffs are set to begin Friday at Vanscoy and on May 6 at Allan.

“This is a direct result of railway performance challenges experienced so far this year,” Richard Downey, a spokesman for the company formed this year in the merger of Potash Corp. of Saskatchewan Inc. and Agrium Inc., wrote in an email. “If there is a strike at (Canadian Pacific Railway Ltd.), this could result in additional mines requiring downtime.”

Canadian National Railway Co., however, says it is current on all of its orders, including those for the Saskatoon-based miner. Spokeswoman Kate Fenske acknowledged that January was difficult but said the railway rebounded in February and March.

“There’s nothing outstanding,” Fenske said, noting that over the last two months the railway has taken on additional orders from Nutrien to assist with “warehouse containment issues.”

Canadian Pacific Railway Ltd. did not make anyone available for an interview, but said in an emailed statement that “CP continues to work closely with our potash customers.”

Another Nutrien spokesman, Will Tigley, said the Saskatoonbased company expects the layoffs to be short “but it all depends on railway status.”

Mosaic Co. spokeswoman Sarah Fedorchuk said the company has limited storage at its three mines in the province, and has “been challenged this winter and spring” to receive the level of rail service it requires. “The warehouses at our sites are currently close to or at containment so we have shifted our maintenance schedules in order to help mitigate the impact,” Fedorchuk wrote in an email.

The Plymouth, Minn.-based company is monitoring the situation but not currently planning layoffs, she said.

Together, Mosaic and Nutrien can produce about 30 million tonnes of potash each year — slightly less than half of global demand.

Representatives of K+S Potash Canada, which operates the province’s newest mine, were not avail- able for comment.

Two unions representing CP employees were set to strike last week, but agreed to postpone a walkout after the federal government ordered them to vote on the company’s final offers.

CP and CN have been under pressure to improve service amid fears about a backlog like the one estimated to have cost western farmers $6.5 billion in 2013 and 2014.

In March, CN dismissed its chief executive and apologized for not meeting grain shippers’ expectations. Both railways, which struggled in the face of winter weather, promised to improve service.