Potash Corp. Announces operational changes; To cut workforce in Canada, the United States and Trinidad by 18% - We are reducing our permanent potash workforce by approximately 570 people. The majority of these positions will be at our Lanigan and Cory facilities in Saskatchewan as well as our New Brunswick operation. Our Patience Lake, SK facility and Saskatoon Corporate Headquarters will also be affected. - We will be closing the Suwannee River chemical plant in the second half of 2014 - one of two at our White Springs, FL phosphate facility. This move will impact approximately 350 people.
Operating changes include: - Suspending production at one of our two Lanigan mills by year end, while keeping it in a care-and-maintenance mode; - Reducing production at our Cory facility by year end; and - Ceasing production at our Penobsquis, NB facility at the end of the first quarter 2014, which will allow us to accelerate development activities at our Picadilly mine. - We anticipate our operational capability for 2014, along with our inventory position, will provide us the ability to supply more than 10 million tonnes, which should provide ample supply cushion. - A loss of capacity at White Springs is expected to be partially offset by higher operating rates at our Aurora, NC phosphate facility. We anticipate a net loss of approximately 215,000 tonnes of P2O5 annual production within our phosphate business beginning in 2015, although product mix optimization will result in improved per-tonne gross margin contribution. The impact on customers is expected to be minimal due to our product mix flexibility, as well as the ability to direct volumes to offshore or domestic markets.
- The majority of changes are anticipated to be completed in 2013 - We expect potash cost savings of $15-$20 per tonne in 2014 with a targeted reduction of $20-$30 per tonne by 2016 (from 2013 levels). In phosphate, we anticipate an annualized gross margin improvement of approximately $10-$15 per P2O5 tonne. - One-time costs associated with these changes are expected to approximate $70 million for severance charges. We are currently reviewing the carrying value of our affected assets and a write-down, if required, will be incorporated into our fourth quarter 2013 results.