Potash mine workers ‘blindsided’ by layoffs
Workers at Mosaic Co.’s Colonsay potash mine were “totally blindsided” as they arrived for a shift change and were escorted to boardrooms by private security to be told they were out of a job, a staff representative says.
About 330 workers at the mine 60 kilometres east of Saskatoon received layoff notices on Wednesday. They’ve been told they’re out of a job until Jan. 3, said Mike Pulak, staff representative for United Steelworkers (USW) Local 7656.
“One of our members asked a question, what was the reason, and the reason given was that they have no sales, no international sales, which in our opinion is false,” Pulak said. “Mosaic is part of the Canpotex (international marketing) group with Agrium and (Potash Corp. of Saskatchewan), and if there was no sales, that would mean everybody would be shut down.”
Mosaic, which operates three mines in Saskatchewan, decided to “idle” its Colonsay operation and rely instead on its Esterhazy and Belle Plaine mines amid “really challenging” market conditions, a spokeswoman for the company said.
“Colonsay is our highest-cost mine, and that’s why the decision was made,” Sarah Fedorchuk said, adding that while the mine is comparatively expensive to operate, the company has no plans to shutter it permanently.
“Lower global potash demand and market prices require that we curtail production. Idling Colonsay will enable us to meet our customers’ needs while reducing our production costs,” Joc O’Rourke, Mosaic’s president and CEO, said in a statement.
The layoff notices issued Wednesday are temporary but effective immediately; affected employees will be given pay in lieu of notice, Fedorchuk said.
USW Local 7656, which represents workers at the Colonsay mine, has been without a contract since May 2015. On July 6, one week before the layoff notices, 99.3 per cent of union members voted against a contract offered by the company.
“(The timing) feels suspect and we will be seeking legal counsel,” Pulak said, adding that the union expected the dispute to be resolved through conciliation. “How do they expect us to go to conciliation when they just laid us all off?”
Fedorchuk denied that the decision to temporarily shutter Colonsay was related to the ongoing negotiations. She said it’s not uncommon for unionized employees to vote down contract offers, and that miners at Esterhazy did the same thing two weeks ago.
“A temporary layoff of 330 people is a decision that requires a lot of thought and a lot of preparation on our end, and it’s not something that we made overnight and it’s not reactionary in any way,” she said.
The global market for potash is extremely weak. Prices peaked at around US$900 per tonne in 2008 but have been hovering around US$300 per tonne since 2014.
In its 2016-17 budget, the Saskatchewan government said it expects prices to average US$205 per tonne this year, with production remaining flat before growing in 2017 in response to increased global demand.
Despite weak prices, the government has pledged to continue its ongoing potash royalty review. The government has said it expects to collect $420.4 million in potash revenue this year, down from its projection of $796.0 million.
Potash companies with operations in the province have taken various steps in response to the oversupplied market.
Last month, citing “economic and commercial considerations,” Canpotex abandoned its plan to build a $775-million export terminal at the Port of Prince Rupert in British Columbia.
Earlier this year, PotashCorp shuttered its Picadilly mine in New Brunswick and announced temporary production curtailments at two of its Saskatchewan operations. The company said the measures were intended to cut costs in the face of a weak market.
Mosaic cut 46 jobs at the Colonsay mine in October 2015. Fedorchuk said at the time that the permanent layoffs came in response to “current market conditions.”
It’s always concerning when a mining firm lays off employees, but those companies must also take steps to ensure their businesses are profitable, according to the president of the Saskatchewan Mining Association.
“If you’re not profitable, you’re not going to be employing anybody, so it’s imperative that they are looking at their bottom line and remaining a profitable business,” Pamela Schwann said.
While the potash market will likely be soft for some time, it’s unclear whether companies with Saskatchewan operations will slash additional jobs or continue to cut production, Schwann said.
“We’ve seen some hard decisions made … by some of the other companies. It’s all in the bottom line of making sure their operations are sustainable in the long term.”
The provincial Ministry of the Economy dispatched a rapid response team to offer supports to affected workers after being notified of the layoffs by Mosaic, according to the ministry’s executive director of labour market planning and systems support.
“That’s where staff will actually go out to the communities and hold information sessions with interested and affected employees, and provide them with a range of information about what their options might be,” Leah Goodwin said.
The voluntary service includes advice on how to access employment insurance as well as information regarding how to find and get new jobs, Goodwin said.
Pulak said Mosaic’s decision shows a “total disregard” for the affected miners. The union had planned for a six-week maintenance shutdown this summer, but the “extreme” measures Mosaic took Wednesday were unexpected.
“We do know in potash that sometimes there are layoffs based on the cyclical nature of the industry and we expect to plan for them, (but) this just seems to be a total shock.”