Mosaic to curtail production at Esterhazy mine
October 15, 2019, 7:22 am
The Mosaic Company has announced that it will temporarily curtail production at its Esterhazy mine.
The announcement, when combined with a previously announced potash curtailment, brings total curtailments to up to 600,000 tonnes.
The curtailment is not expected to impact the pace of development at the Esterhazy K3 project.
According to Mosaic, the increased curtailment is based on increasing inventories as a result of a short-term slowdown in global potash markets and increased risks of a delay in Chinese contract settlement.
Mosaic Vice-President Sarah Fedorchuk told the World-Spectator Friday that there are no layoffs anticipated at this time, but the Esterhazy mine will be taking a vacation shutdown for one week in October and two weeks in November, during which production will be halted.
“This is due to a short-term market issue as well as a delay in our China contract signing,” Fedorchuk explained.
“The long-term outlook for potash is solid,” she said. “Unfortunate 2019 has been marked with challenging weather for producers, and a really full pipeline.”
If the full amount of the curtailment is realized in lower fourth quarter 2019 sales, it would result in a negative impact of approximately $150 million in adjusted EBITDA.
“While near-term fertilizer markets remain challenging, we continue to expect a very strong application season in Brazil and North America, and a better supply and demand balance in 2020,” said President and CEO Joc O’Rourke.
Esterhazy is Mosaic’s largest mine.
Back in August, Mosaic announced plans to indefinitely shut down its Colonsay, Sask. potash facility, which will result in about 340 workers being laid off.