U.S. fertilizer producer Mosaic Co. plans to idle its potash mine in Colonsay, Saskatchewan, for the rest of 2016 amid “challenging” market conditions.
About 330 employees received temporary layoff notices as a result of the idling, Plymouth, Minnesota-based Mosaic said Wednesday in a statement.
Spot potash prices in the U.S. Corn Belt tumbled to a nine-year low this year, Green Markets data show. Three annual declines for crop prices have depressed farmer income and demand for fertilizer. Potash producers continue to await a deal announcement with China setting benchmark prices, according to Bloomberg Intelligence. Last month, Belarusian Potash Co. agreed to supply potash to India at the cheapest cost in almost a decade.
“Lower global potash demand and market prices require that we curtail production,” Mosaic Chief Executive Officer Joc O’Rourke said in the statement. “Idling Colonsay will enable us to meet our customers’ needs while reducing our production costs.”
Potash Corporation of Saskatchewan Inc., the largest supplier of potash in North America, in January announced that it was indefinitely suspending production at a mine in New Brunswick amid a slump in prices. Earlier this year, Mosaic also said it would cut output of phosphate fertilizer.
Mosaic rose 1.9 percent to $26.99 at 12:46 p.m. in New York. The stock has fallen 40 percent in the past year.
Earlier Wednesday, RBC analyst Andrew Wong lowered Mosaic’s rating to sector perform from outperform amid a longer-than-expected recovery in phosphate prices.
Mosaic is scheduled to report second-quarter earnings on Aug. 2.