Intrepid Potash idles US mine, lays off hundreds
US-based Intrepid Potash (NYSE:IPI) will halt its mine in south-eastern New Mexico and lay off about 300 workers, as prices for the fertilizer ingredient remain close to historic lows and demand hasn’t picked up.
The Denver-based company said this week the decision to place its money-losing West facility in Carlsbad in “care and maintenance” was a direct consequence of a challenging environment.
The operation will close in July, Intrepid Potash said. The company, which also first-quarter loss of $18.4 million added it is taking other actions to lower overall production costs and optimize its mine portfolio.
Unlike metal miners, potash producers are having a tough year as prices for the fertilizer ingredient have remained low on increased competition and a supply glut triggered by lower demand from top consumers China and India.
Prices are hovering around $270 a tonne, significantly down from more than $800 a tonne in 2008.
In April, some of the top producers downgraded their outlook for the year as a result.
Canada’s Potash Corp of Saskatchewan (NSE, TSE:POT), the world’s biggest fertilizer company by capacity, cut its full-year profit forecast due to weak demand and lower prices, raising concerns of another dividend cut.
And Russia’s Uralkali, the world’s largest potash miner by volume said it now expects demand to fall to 58-60 million metric tons, down from 61 million tons in 2015.