Nutrien’s US$1.8B N.B. mine writeoff illustrates dismal state of potash market – by Gabriel Freidman (Financial Post – November 7, 2018)

For nearly three years, the town has been working to absorb the shock of the closure

Saskatoon-based Nutrien Ltd., the largest potash company in the world, announced late Monday evening that it is closing a mine in Sussex, N.B. that cost billions of dollars to construct and that it had barely operated.

Marc Thorne, mayor of Sussex, said that the news arrived quickly. On Monday, the company asked for a meeting on short notice, and told him it planned to close its potash mine and return the site to nature.

“In four or five years, there may not be any indication that the mine was even there,” said Thorne. The situation illustrates the dismal state of the potash market. Nutrien’s predecessor, the Potash Company of Saskatchewan, started building the mine in 2007 and finished eight years later at a cost of US$2.2 billion.

During that time, the bottom dropped out of the potash market and prices fell 75 per cent from more than US$800 per ton to around US$225 per ton. In early 2016, not long after construction finished, the mine was put on “care and maintenance” and 430 employees were laid off.

Now, Nutrien is taking a US$1.8 billion impairment charge, and closing the mine. That will save some $25 million per year, including the elimination of around 50 staff.

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