PotashCorp Closing New Brunswick Mine
SUSSEX–PotashCorp announced this morning that it is immediately suspending operations at its Picadilly Mine near Sussex. Up to 430 people will lose their jobs at the mine as a result.
It’s a massive hit to the economy of the Sussex area, and will also be felt across New Brunswick, including at the Port of Saint John.
The company will offer up to 100 jobs in its Saskatchewan operations to New Brunswick employees, along with relocation assistance. PotashCorp has also set aside $5 million for a local community investment fund.
[mks_pullquote align=”right” width=”250″ size=”18″ bg_color=”#e3e3e3″ txt_color=”#000000″]Sussex Mayor:
Mine Closure Shock[/mks_pullquote]
PotashCorp says the decision to close the mine comes “amidst a challenging macroeconomic backdrop.” The company expects the closure to reduce its costs by $40 to $50 million in 2016, although it admits this will be partially offset by severance and transition costs that will reach about $35 million and will be reflected in the company’s first quarter 2016 earnings.
“This is a very difficult day for our employees and our company,” said PotashCorp President and Chief Executive Officer Jochen Tilk in a statement. “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.”
“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.”
The closure of the mine means PotashCorp will not move forward with planned capital expenditures of $50 million in 2016 and $135 million in 2017/18.
The Picadilly mine will be placed in “care-and-maintenance mode” that will cost $20 million in 2016 and $15 million in subsequent years. It will require a full year before operations at the mine could resume to current levels.