UPDATE 1-Agrium potash mine to stay shut longer, loss expected

Thu Aug 7, 2014 12:09pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

(Adds details on shutdown, potash loss)

By Rod Nickel

Aug 7 (Reuters) - Agrium Inc said Thursday it will keep its only potash mine shut for longer than expected after a breakdown last week, and the downtime will cause it to lose $40 million on wholesale potash operations in the second half of this year.

The Canadian fertilizer company had halted production at the Vanscoy, Saskatchewan mine last Thursday due to a mechanical failure on its main hoist system. The outage prompted the company to bring forward a planned turnaround to tie in its capacity expansion project, and Agrium said production would remain suspended until the tie-in was completed.

The mine will remain shut three to four weeks longer than the 14 weeks planned to tie in its capacity expansion, Chief Executive Officer Chuck Magro said on a conference call.

Agrium expects to lose a gross $40 million on potash in the second half of the year due to fixed costs and limited production, he said.

Potash accounts for a smaller part of Agrium's business than nitrogen sales and farm retail operations, making up 7 percent of overall gross profit in 2013.

Late on Wednesday, Agrium reported a smaller-than-expected drop in second-quarter profit. Excluding one-time items, it earned $4.37 per share, above analysts' estimates of $4.11 a share. Sales rose 6 percent to $7.34 billion, above analysts' expectations of $7.18 billion.

Agrium shares fell 2 percent to C$98.57 in midday trading in Toronto. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Bernadette Baum)