Ongoing strike disrupts PotashCorp production

(Resource News International) — Workers at three Saskatchewan potash
mines owned by Potash Corporation of Saskatchewan
(PotashCorp) continue to strike and the union and the company
don’t appear any closer to reaching an agreement.

And production
of industrial potash has been disrupted as a result of the
labour dispute.

On August 7, 487 unionized workers at the Allan, Cory and
Patience Lake mines officially went on strike in an effort to
secure wage increases in their new labour contracts. Their

previous contracts expired April 30.

According to PotashCorp, the three mines, all in the Saskatoon area, together account
for about 30 per cent of the company’s potash production.

The workers are represented by United Steelworkers’ (USW)
Local 7689 at Allan, USW Local 7458 at Cory and USW Local 189
at Patience Lake and are responsible for underground mining
operations as well as milling and shipping activities on the
surface.

“To date there have not been any breakthroughs between
the union and PotashCorp. The two sides are not at the
bargaining table at this time,” said Bill Johnson, director of
public relations for PotashCorp.

“Our company has been quite clear that we put what we
believe is a very competitive offer on the table,” he said. “It is about
a 35 per cent increase for our top workers over three years and it
would make the people at those facilities the highest-paid
potash workers in North America.”

It is now up to the union to vote on the company’s
proposal, he said. To a large extent, the duration of the

strike will depend on the union.

In the meantime, potash mining and milling operations
have begun again the Allan mine. Management from the Cory and
Patience Lake sites have been brought in to help run the Allan
facility, Johnson said.

Contingency plans continue to be evaluated for the Cory
and Patience Lake facilities, although production typically
does not occur at this time of year at Patience Lake, which is
a solution mine.

The process used at that facility requires cold weather
and as a result the mine typically only operates from October
through to May.

Johnson said the strike has impacted the company’s
ability to service its industrial clients.

Roughly five per cent of potash produced by PotashCorp is sold to
industrial customers, and because Cory and Allan are the two
facilities which produce industrial potash, that segment of
business has been the first to be affected, Johnson explained.

“Off-season”

The vast majority of the potash produced by PotashCorp

is sold into the fertilizer market.

“As far as the agricultural market goes, we are in a bit
of an off-season right now in terms of supplying those
customers, so it is too early to see what the impact will be
moving forward,” Johnson said.

Production at the three affected mines reportedly
accounts for roughly six per cent of world capacity.

A prolonged labour disruption at the three mines would
undoubtedly cause concern in the agriculture sector because
PotashCorp is the world’s largest potash producer and
fertilizer prices have already climbed sharply over the past
year due to a tight supply/demand equation.

The Agricultural Producers Association of Saskatchewan (APAS) said its members have indicated that
fertilizer prices are already at least 50 per cent higher than during
the peak of the 2008 spring seeding demand.

Fertilizer dealers in the province are already projecting
additional price increases of 30 per cent for fall fertilizer
purchases, according to APAS.

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