Mosaic shutting down Colonsay mine indefinitely

K3 project at Esterhazy remains on track

August 7, 2019, 6:23 am

The Mosaic Company plans to indefinitely shut down its Colonsay, Sask. potash facility, which will result about 340 workers being laid off.

The company stated the decision is due to “a challenging North American planting season.” The goal of the shutdown is to lower its potash inventory.

The shutdown is expected to continue until market conditions improve

“We’ve experienced a North American spring season that was wetter and later than any in recorded history,” Mosaic president and CEO Joc O’Rourke said in a news release.

Nearly 400 hourly unionized workers received temporary layoff notices, but the shutdown is expected to impact just over 340 people, as a small crew will keep the site on standby.

Meanwhile, the K3 project t to increase production at the lower-cost Esterhazy potash mine remains on schedule.

"The actions we’ve taken to reshape our business, including the permanent closure of our Plant City phosphates facility and the acceleration of the development of the K3 potash mine leading to today’s announced curtailment of potash production at Colonsay, are expected to increase our operating leverage to the anticipated strong market fundamentals in the second half of 2019 and beyond," said O'Rourke

Mosaic reported a net loss of $233 million for the second quarter of 2019, including a $284 million noncash after-tax charge for the permanent closure of the company’s Plant City phosphate facility. The company reported diluted earnings per share of negative $0.60, which includes a negative $0.72 per share impact for notable items, primarily the closure of the Plant City facility. For the period, adjusted EBITDA was $349 million, and adjusted earnings per share was $0.12.

Colonsay is about 55 kilometres southeast of Saskatoon.