Potash Corp. of Saskatchewan Inc. is suing the engineering company that built part of its $2.2 billion Picadilly mine in New Brunswick, alleging that construction flaws have resulted in the “complete failure” of a mine shaft.
The Saskatoon-based miner seeks unspecified damages from Cementation Canada Inc., which was hired in 2008 to oversee the design and construction of two 900-metre deep shafts at the mine in Penobsquis, N.B.
The timing of this suit is notable, because Potash Corp. announced on Tuesday that it is halting production in New Brunswick and laying off up to 430 workers.
Potash Corp. spokesman Randy Burton said the filing of the lawsuit and the announcement of the production suspension is just a coincidence. Potash Corp. claims the shutdown is simply a response to the weak potash market, which is suffering because of lackluster demand and overcapacity.
Cementation Canada president Roy Slack told the Financial Post that his company is working with Potash Corp. to fix the problems with the mine. He said Potash Corp. only filed the suit because it wanted to protect its rights under a contract between the two companies before the warranty period expired last week.
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