CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
More than 100 workers who were trapped at PotashCorp’s (TSX, NYSE:POT) Allan mine for hours Monday following a fire that broke underground are now safe at home.
The incident began when a loader caught fire at around 3:30 p.m. Monday, forcing the 114 miners who were underground at the moment to seek refuge at stations where there’s clean air. They had to wait there until about at 9 p.m. and everyone was out by midnight, CBC News reports.
Allan mine, located in Canada’s Saskatchewan, will resume operations this morning.
Operations at Allan will be halted for three months, beginning in February next year, as part of PotashCorp’s efforts to match supply with market demand.
PotashCorp, the world’s largest producer of the fertilizer by capacity, warned last month it will have to halt production at the mine for three months, beginning in February next year, as part of the company’s efforts to match supply with market demand.
As part of the measures, the firm — which agreed in September to merge with peer Agrium — is also cutting production at other operations, which will result in approximately 100 full-time workers and 40 temporary miners being laid off.
A global oversupply of the fertilizer has caused prices to tumble in the past year, leading to layoffs and mine closures across the sector.
Prices for the fertilizer ingredient began their decline four years ago, as weak crop prices and currencies weakness pinched demand. Potash has also suffered from increased competition following the breakup in 2013 of a Russian-Belarusian marketing cartel that previously helped limit supply.
Potash’s collapse picked up speed in the past year, putting additional pressure on producers, whose profits have been hit by falling prices, largely due to weak currencies in countries such as Brazil and low grain prices.
Crop prices have also been hurt, with corn and wheat at seven-year and 10-year lows respectively, which have reduced farmers’ willingness to maximize production with fertilizers.
Earlier this year, BHP Billiton (ASX, NYSE:BHP) (LON:BLT), revealed it was ready to place its Canadian Jansen potash project in the back burner if prices for the fertilizer ingredient don’t pick up by the end of the decade.
