PotashCorp to close N.B. mine indefinitely, cutting up to 430 jobs

SUSSEX, N.B. -- Amid weak global markets for fertilizer products, Potash Corporation of Saskatchewan shut down its Picadilly mine in southern New Brunswick for an indefinite period Tuesday, eliminating up to 430 jobs.

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"This is a very difficult day for our employees and our company," PotashCorp. CEO Jochen Tilk said in a statement.

"We understand the significant impact to our people in New Brunswick and the surrounding communities and are committed to helping those affected through this challenging time."

The company (TSX:POT) said it is cutting costs by focusing on its lower-cost operations in Saskatchewan.

The move is expected to save the company up to $50 million in 2016, although these savings will be offset by $35 million in severance costs.

About 35 employees will be kept on to maintain the idled facility near Sussex. Another 100 workers will remain in place through a four-month transition period.

Should the company decide to rsume operations, it would take about a year to get it running again.

The company, based in Saskatoon, Sask., has been struggling to cope with weak markets for years. Cuts made in 2013 took out 3.5 million tonnes in potash production.

When the company reported a drop in quarterly profits and sales in October, it also announced it would permanently close its Penobsquis mine in New Brunswick ahead of schedule, cutting 140 contract jobs.

The mine, adjacent to the Picadilly operation, was supposed to close in 2016 but the shutdown was moved up to November 2015.

At the time, PotashCorp. said the Penobsquis closure would allow the company to ramp up production at Picadilly, which is a newer and lower-cost operation.

On Tuesday, the company said more than 100 positions will be available for New Brunswick employees at its Saskatchewan operations with funds being made available for relocation.

There will also be severance and assistance packages for workers who choose not to relocate, and a $5-million community fund will help former employees get skills training and provide support to local businesses and charitable organizations.

Customers traditionally served by the New Brunswick mines will now get their potash from the company's Canpotex operation in Saskatchewan, where volume is expected to grow by 750,000 tonnes.

The company is the world's largest supplier of potash, which is used mainly as a fertilizer. It also produces large amounts of nitrogen and phosphate, which are also used as crop nutrients.



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