Roughly 350 workers laid off as Mosaic indefinitely shuts down Colonsay potash mine

The Mosaic Company has announced itsColonsaymine will be shut down until prices improve.

On Tuesday, the agricultural giant announced layoff notices had been issued for the 395 employees at the potash mine, which is located 59 kilometres southeast of Saskatoon.

Fifty-two employees are expected to keepworking to keep the mine operational and the layoffs willbegin next month, according to Mosaic.

"This decision has really been in response to the challenging spring that farmers have had in the Midwest of the United States," said company spokesperson Sarah Fedorchuk.

"It was the latest and wettest planting season on record. And it really delayed a lot of our shipments."

According to the company's latest financial statement, Mosaic reported a $233 million loss in the second quarter of 2019.

Fedorchuk said the slowdown will help the company manage its inventory of potash.

In a news release, the company said it has accelerated the development of its K3 potash mine in Esterhazy. According to the company, once that mine is completed in 2024, Esterhazy will be the largest, most competitive underground potash mine in the world.

While the company will not commit to an opening date, Fedorchuk said the decision was made in response to this year's weather, not the long-term forecasts of potash.

"The overall fundamentals for the potash industry still look fairly strong," she said. "We're still seeing slight growth year over year on a global perspective."

In May, Nutrien laid off 80 workers at its potash mine in Vanscoy, Sask. as it cut back production there. The company said it expected a similar number of vacancies to open at other mines this year.

'At the mercy of heavy cycles'

SylvainCharlebois, aNova Scotia business professor, saidthe layoffs show the industry should start looking at alternative uses for potash to offset the resourcerollercoaster.

Charleboisis not suggesting it not be used in fertilizer just thatit can also be used in animal feed, water softener, soap and glass making.

"Surely we could find some way to increase demand or stimulate demand beyond fertilizers," he said in an interview. "Because right now we're at the mercy of heavy cycles and the only thing we can do is to see companies laying off more people in regions, which is unfortunate."