WINNIPEG, Manitoba (Reuters) - About 500 workers at three potash mines owned by fertilizer giant Potash Corp of Saskatchewan could be on strike or locked out as early as Friday because of a contract dispute, the company and the United Steelworkers union said on Wednesday.
Both sides said they were still willing to negotiate and hoped to avert job action that could affect production of potash, a fertilizer in hot demand because of tight global supplies and strong demand from grain farmers trying to boost yields amid a world food shortage.
But there was a "significant difference" between the company's position and what the union wants, said Roger Falconer, head of the strategic campaigns department at the union's Canadian head office.
"We have a serious problem, because this corporation is making immense, obscene amounts of profit, and we believe that they have the ability to pay, and we're asking for something better than their final offer," Falconer said in an interview.
The union will be in a legal strike position at the Cory, Allan and Patience Lake mines as of 1 p.m. local time (3 p.m. EDT) on Friday, Falconer said. Potash Corp would also be able to lock out workers at that time.
"At this time, we do not have any formal negotiations scheduled with the union, but the lines of communication remain open," said Bill Johnson, a spokesman for Potash Corp.
"We remain confident that our offer is a very fair and competitive one, and we're hopeful that it will be the basis for a negotiated settlement," he said.
Neither the company nor the union would comment on what the offer contained, nor what key differences remained.
Johnson declined comment on whether a strike or lock-out would halt production at the mines, which accounted for 2.769 million metric tons or 30 percent of the company's production last year.
The Patience Lake mine does not produce potash during the summer months. The company has planned expansions at both the Cory and Allan mines as it tries to feed growing world demand.
Johnson also declined comment on what impact a work stoppage would have on Potash Corp, or prices for its namesake mineral.
"It's a tight market right now, but our hope is that we won't have a work stoppage at these sites," he said.
Potash Corp's profits have soared in tandem with record world grain prices, pushing the once-quiet stock into the limelight on the Toronto and New York stock exchanges.
The stock was down 7 percent or C$15.37 at C$202.23 on the Toronto Stock Exchange on Wednesday, which is about 18 percent off record highs set a month ago.
Potash Corp is scheduled to release its second-quarter earnings on Thursday.
The company is a major employer in the Prairie province of Saskatchewan, home to one of the world's largest potash deposits, and the union hopes to exert pressure on Potash Corp to settle the contract by raising awareness of lucrative tax breaks it receives, Falconer said.
The company last experienced a labor dispute in December 2001 at its Lanigan, Saskatchewan, mine, where a lock-out lasted for 17 days.
Reporting by Roberta Rampton; editing by Rob Wilson