PotashCorp has announced temporary layoffs starting in November and December for 800 workers at three of its Saskatchewan potash mines, Saskatoon media report.
Saskatoon radio station CKOM on Friday quoted PotashCorp spokesman Bill Johnson as saying the layoffs at the company’s Lanigan, Allan and Rocanville mines will last two or three months.
Johnson was quoted as saying some of the affected workers could take on maintenance or mine construction work for the company during the mine layoffs.
This marks the third temportary layoff period this year for workers at PotashCorp’s mines, as the company seeks to regulate supply in line with slipping demand.
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CBC reported Saturday that when this round of layoffs was initially reported two weeks ago, it was expected to affect 700 people.
Coming off a recent string of record-breaking quarterly profits, Saskatoon-based PotashCorp last Thursday reported net income of US$248.8 million on US$1.099 billion in sales for its third quarter ending Sept. 30, down almost 80 per cent from $1.27 billion profit on $3.06 billion in sales in the year-earlier period.
“The uncertainty among fertilizer buyers has lasted far longer than we anticipated, but cannot continue indefinitely,” CEO Bill Doyle said in the company’s release Thursday.
Writing in the Globe and Mail Thursday, financial analyst Fabrice Taylor said PotashCorp is now paying for its past record profits.
PotashCorp, he wrote, “is the Saudi Arabia of the industry, the low-cost swing producer. Would it have better served its shareholders had it tempered prices by increasing production in even if that meant earning less? It certainly had the capacity to do so.
“There are many reasons, including big crops, for plummeting demand. Might one be that buyers were taking huge writedowns on their potash inventories which they paid $1,000 per tonne for? They have less money and less inclination to buy more today because of what it cost them?”
