Mosaic lays off 350 workers, idles Colonsay mine
COLONSAY, SASK. The Mosaic Co. says it is cutting about 350 workers at its Colonsay potash mine in Saskatchewan as it ramps up production at a lower-cost operation.
The fertilizer giant says it has issued 395 layoff notices to hourly workers as it indefinitely idles the Colonsay mine, but expects 52 of those workers to stay on to keep the operation on standby in case market conditions improve.
The move comes after unprecedented wet spring weather in North America disrupted the planting season and affected fertilizer demand, though potash prices still rose.
The company says it will make up for the lost Colonsay production by relying both on inventories and production at its lower-cost Esterhazy K3 project in Saskatchewan that it has been developing for years.
The company committed $1.7 billion in 2015 to accelerate development of the Esterhazy K3 project. The mine, expected to be at full production by 2024, has produced more than 400,000 tonnes of ore in the first half of this year.
Mosaic says the mine closure and production shift are expected to avoid US$40 million to US$50 million in cash spending this year.
Colonsay mayor James Gray said the company’s decision to shutter its nearby mine for six months a couple of years ago affected the town of about 450 people, and he expects the latest shutdown will not be any different.
“I don’t even have to wonder about what it’s going to do to the people. It’s not going to be easy on any of them that have kids,” said Gray, who was first elected mayor of the town 50 kilometres east of Saskatoon 12 years ago.
Speaking on behalf of United Steelworkers Local 7656, USW staff representative Darrin Kruger said workers at the mine were stunned by the announcement.
“They’re in shock right now. Lots of concern.
“Of course it’s early, so we don’t have many answers at this point … We’ll have to figure that out in the days to come,” Kruger said.