Potash Corporation of Saskatchewan is indefinitely suspending its Picadilly mine operation near Sussex, N.B..
The move is expected to result in the loss of 420 to 430 jobs.
Jochen Tilk, PotashCorp president and chief executive officer, said in a statement released Tuesday it was "a very difficult day for our employees and our company."
Sussex Mayor Marc Thorne said PotashCorp.'s decision to suspend operations at the local mine is 'heartbreaking.' (CBC)
"While these are important steps in running a sustainable business and positioning the company to best meet the needs of its many stakeholders over the long term, such decisions are never easy," his statement said.
"We understand the significant impact to our people in New Brunswick and the surrounding communities, and are committed to helping those affected through this challenging time."
Sussex Mayor Marc Thorne said he was in "disbelief" when he heard about the corporation's decision to suspend mine operations.
"It is just heartbreaking to hear this news today," Thorne said.
The mayor said he's unsure how the community will fill the economic hole.
'All our high-paying jobs in the community are gone as of this morning.'
- Deon Alcock, worker at potash mine
"The jobs have been well-paying jobs and quite frankly I don't see how they can be replaced," he said.
Deon Alcock, a worker at the mine, said his phone has not stopped ringing, with people wanting to talk about the mine. He said Tuesday that the news took employees by surprise.
"All our high-paying jobs in the community are gone as of this morning," he said.
"I think they are in the same boat as everybody else. They are surprised and thinking about other alternatives. But right now as we sit, there isn't many alternatives for anything in New Brunswick or Alberta."
'Devastating' impact on Sussex
Progressive Conservative MLA Bruce Northrup, who represents the communities surrounding the potash mine, said the news is "devastating" for the region.
Progressive Conservative MLA Bruce Northrup said the suspension of operations at the mine is 'devastating' for neighbouring communities in his riding. (CBC)
"The local economy depends upon it, whether it is car dealerships, or Tim Hortons or shopping at the mall. It is definitely going to affect the area for sure," Northrup said on Tuesday.
The company said a core crew of about 35 will be kept on at Picadilly for care and maintenance of the operation.
The local MLA said he hopes if the potash market rebounds, the mine could reopen.
Northrup used the suspension of operations at the potash mine to take a shot at the moratorium of shale gas that was imposed by Premier Brian Gallant's government.
While the mine's troubles were not directly linked to the moratorium, the MLA said he would like the provincial government to lift it and guarantee PotashCorp an "ample supply of natural gas."
"The Liberals, the four years we were in government, they said we put all our eggs into one basket. There are no eggs in the basket there right now. The eggs are all gone," he said.
"They mismanaged the energy and resource sector to the point where there are no eggs in the basket. I'm demanding that Premier Gallant and the energy minister get involved in this directly and at least give them ... a secure source of natural gas for the potash mine."
New Brunswick MP Dominic LeBlanc said the federal government must step up to help the hundreds of laid-off workers at the potash mine.
The federal cabinet minister said there are no easy replacements for the high wages and long-term employment that the mine offered.
LeBlanc said the short-term measures may be limited to providing employment insurance and helping with training.
Capital savings for Potash
The company said more than 100 open positions in its Saskatchewan operations will be available to New Brunswick employees, along with relocation assistance.
The company said the suspension of its New Brunswick operation will allow it to:
- Improve production at lower-cost operations.
- Save money on capital expenditures.
- Maintain long-term flexibility.
- Preserve company jobs over the long term.
"We expect to increase our competitiveness and reduce cost of goods sold by $40 [million]-$50 million, which will be offset by severance and transition costs.
PotashCorp says the suspension will also eliminate $50 million in capital spending this year and another $135 million in 2017-18.
The company's international customers who were historically served by the New Brunswick operation will now be served from Saskatchewan through Canpotex.
PotashCorp's storage and loading facilities at the port in Saint John will be made available to Canpotex.
The annual cost of care and maintenance at the Picadilly mine is estimated at $20 million in 2016 and $15 million in subsequent years.
The company said if it ever decides to resume production in New Brunswick, it will take about one year to get the mine back in operation.
New Brunswick employees who do not remain at Picadilly or choose not to relocate to Saskatchewan will be given severance and assistance packages.
PotashCorp said it will establish a $5-million fund to:
- Help employees with job transition assistance, including skills training and education support.
- Provide financial support to local business.
- Support local charities.
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