UPDATE 1-Potash Corp rescinds layoff notices affecting 50 workers

Mon Jun 16, 2014 2:24pm EDT
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(Adds analyst comment, share activity, background on job cuts)

By Rod Nickel

June 16 (Reuters) - Potash Corp of Saskatchewan said on Monday it will rescind layoff notices affecting 50 workers at its Penobsquis, New Brunswick, facility due to tight conditions in the granular potash market.

The move is a temporary extension of operations at the Penobsquis mine, where production was previously expected to cease by the second quarter of 2014, the company said in a release. Potash Corp also said that initial production at its new Picadilly, New Brunswick mine is expected during the fourth quarter.

The layoffs were part of cuts to 18 percent of Potash Corp's workforce, representing more than 1,000 jobs, announced in December, as it struggled with slumping demand and weak prices for the crop nutrient.

The news is positive for Potash Corp, along with data that last week showed North American potash supplies had dipped in May to their lowest level since September, 2012, said Barclay's analyst Matthew Korn, in a note.

Granular potash is a form of the crop nutrient that mixes easily with nitrogen and phosphate fertilizers and is favored in the United States and Brazil.

Potash Corp shares rose nearly 2 percent in afternoon trading in New York and Toronto, exceeding gains by fellow potash miners Mosaic Co and Agrium Inc. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Benkoe, Bernard Orr)