Mosaic to reopen Colonsay potash mine in a matter of days

About 330 workers who were temporarily laid off at Mosaic’s (NYSE:MOS) Colonsay potash mine in Saskatchewan last July, are counting the days until the company resumes operations.

The decision to reopen the idled mine was based on the US fertilizer producer’s expectations that 2017 will be a stronger year for the potash industry.

Decision to reopen the idled mine was based on Mosaic's expectations that 2017 will be a stronger year for the potash industry.

“We expect supply reconciliation and demand growth will result in a productive operating environment and are optimistic that 2017 will be a stronger year for the potash industry,” a Mosaic spokesperson told Global News.

Analysts had speculated it was highly unlikely the company would reopen the mine in 2017, due to excessive global capacity and a faltering farm economy. Rival K+S AG is set start production this year in Saskatchewan, and Potash Corp will complete expansion of its biggest mine there.

But the Plymouth, Minnesota-based company is going ahead with the plans to resume operations at the mine, which has an annual capacity of 2.6 million tonnes.

The firm, the world’s largest producer of finished phosphate products, was not the only potash producer to take extreme measures last year on the back of low prices and weak demand. In January, PotashCorp (TSX, NYSE:POT) mothballed its new Picadilly potash operation in New Brunswick, dismissing more than 420 employees. A month later, it curbed production at all of its Saskatchewan operations.

Later, Intrepid Potash (NYSE: IPI) said it would close the high-cost West Facility in Carlsbad, New Mexico, in July, affecting about 300 employees.

Colonsay mine, located about 65 kilometres southeast of Saskatoon, is one of Mosaic’s three Canadian potash operations. The other two are Rsterhazy and Belle Plaine.