Intrepid PotashInc. said May 9 that it has decided to idle operations and place theCarlsbad West potashproject in New Mexico on care and maintenance in July.
The company attributed the decision on reduced profitabilityin recent months as oversupply and foreign competition in the U.S. potash markethas pressured prices.
The decision will affect about 300 employees.
The operation, which accounted for 42% of the company's potashoutput in 2015, is expected to remain under care and maintenance until potash pricesrecover to an economic level, the company said.
In a separate release, Intrepid reported that it swung to a netloss of US$18.4 million, or 24 U.S. cents per share, in the first quarter of 2016,from year-ago profit of US$6.5 million, or 9 cents per share.
Company Chair, President and CEO Bob Jornayvaz said that dueto lower potash prices and general oversupply in the U.S. markets the company istaking actions to lower overall production costs and optimize its mine portfolio,which included the decision to idle Carlsbad West.
"At the same time, we successfully converted our to Trio-onlyproduction in early April, ahead of our original timeline. These two transitionsremove our two highest-cost potash production facilities from our portfolio, substantiallyincrease our Trio production, and allow us to focus on our lower cost solar production,"Jornayvaz added.
Intrepid expects to incur charges of US$1 million to US$3 million,or approximately 1 cent to 4 cents per share, related to the idling of the Westfacility during its second quarter.
The company also slid to an operating loss of US$16.5 million,from year-ago profit of US$10.8 million.
Intrepid's first-quarter potash production was 9% lower yearover year at 215,000 tonnes due to deferred production at the HB facility in Mexico. Potash sales dropped 6%to 218,000 tonnes primarily due to the timing of shipments to customers while averagenet realized sales price per potash tonne also fell 40% to US$216 as oversupplyand the strength of the U.S. dollar resulted in significant price pressure.
In the three-month period, Trio product sales reached 50,000tonnes at an average net realized sale price of US$316 per tonne, down from 62,000tonnes produced in the same period of 2015 at an average net realized sale priceof US$367 per tonnes.