November 7, 2008 / 3:55 PM / in 9 years

UPDATE 2-Potash Corp, union reach tentative labor deal

(Adds details, union comment)

TORONTO, Nov 7 (Reuters) - Potash Corp of Saskatchewan (POT.TO) has reached a tentative deal with striking workers at its Allan, Cory, and Patience Lake mines in Western Canada, the company and union said on Friday.

About 500 workers walked off the job on Aug. 7 after contract talks broke down over union demands for a greater share of the company’s profits.

The three mines, located in the potash hotbed of Saskatchewan, account for about 6 percent of world production and 30 percent of the company’s annual output.

The workers, who are represented by the United Steelworkers union, will vote on ratification of the tentative agreement on Nov. 13.

“The question for us is a logistical problem right now, because we have so many members away working. So we have to give them notice for them to come back and vote,” said union official Roger Falconer. He would not give details on the deal.

A Potash spokesman was not immediately available for comment.

At the time of the walkout, Potash was reaping record profits due to soaring world demand for fertilizer to boost crop yields, leaving the company essentially sold out of potash at a time of sky-high prices.

But since then, the global financial crisis has prompted hedge funds and other investors to sour on commodities in general, and has raised concerns that farmers will cut back on fertilizer use as crop prices retreat.

The company has been mining at a reduced capacity at the Allan mine, which is the largest of the three.

Shares of the company, which have sunk more than 60 percent since June, were flat at C$94.25 on the Toronto Stock Exchange on Friday.

$1=$1.17 Canadian Reporting by Cameron French; editing by Rob Wilson

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