Canadian fertilizer giant Nutrien plans to shut down three of its Saskatchewan potash mines for up to two months in the fourth quarter of the year.
The Saskatoon company said Wednesday it “expects to proactively take up to eight-week inventory shutdowns” at its mines at Allan, Lanigan and Vanscoy, Sask. during that period.
If all three mines stay idled for the full eight weeks, the company said, its potash production could be reduced by about 700,000 tonnes.
As a result, Nutrien said in a release, its 2019 EBITDA (earnings before interest, taxes, depreciation and amortization) from potash alone could be reduced by US$100 million and $150 million (C$132 million to $198 million).
Despite short-term market conditions, “we remain positive on potash demand for 2020, as well as the medium to long-term potash fundamentals,” the company said.
Nutrien’s news follows last month’s announcement from fellow fertilizer firm Mosaic Co. that it will temporarily idle its mine at Colonsay, Sask., between Allan and Lanigan.
Mosaic said Aug. 6 it plans to draw down inventories and use production from its Esterhazy K3 potash project, about 350 km southeast of Colonsay, to meet customers’ demand.
Doing so, Mosaic said, allows the company cut its costs of production, accelerate “inventory depletion” and boost its leverage for strengthening markets into next year.
Longer-term, Nutrien said Wednesday, it “remain(s) focused on a gradual ramp up of production to meet demand and to ensure we operate the safest, most reliable and efficient potash business in the world.” — Glacier FarmMedia Network