Nutrien to Close Mine, CN Reaches Tentative Deal

As provincial natural gas reserves dwindle and farmers across Canada plead with the federal government, the CN Rail (TSX:CNR,NYSE:CNI) strike has entered day eight and the first casualty is the largest potash producer in the world, Nutrien (TSX:NTR,NASDAQ:NTR).

The Saskatchewan-based fertilizer producer sent notice to employees of its Rocanville mine yesterday (November 25) that the site would be closed effective December 2 if an agreement between CN Rail and the Teamsters Union isn’t reached. Nutrien’s Rocanville is the largest potash mine in Canada.

The ongoing work action has weighed heavily on the mining and agricultural sectors, delaying shipments and preventing deliveries. Nutrien has been especially affected as a miner and agricultural company in a year that has been more than challenging for the global potash industry.

In its statement, Chuck Margo, CEO and president, expressed his concern for employees who were now left in “uncertainty and hardship” for the holiday season.

“It is extremely disappointing that in a year when the agricultural sector has been severely impacted by poor weather and trade disputes, the CN strike will add further hardship to the Canadian agriculture industry,” he said. “Any further disruption will be harmful to our business, the Canadian economy, and Canada’s competitive position and reputation as a reliable supplier of fertilizer and food.”

The agricultural company, which operates six potash projects across Saskatchewan, temporarily halted production at three of its sites for eight weeks during Q4 in relation to market conditions.

Last week, the Canadian Association of Petroleum Producers and the Mining Association of Canada noted concern over the impact the strike would have on the Canadian economy.

The provinces of Quebec and Ontario have also grown increasingly anxious over the strike as natural gas reserves in both provinces dry up and fresh shipments are delayed.

Workers were on the picket line asking for increased health and safety measures.

Word that a tentative deal had been reached came early Tuesday morning (November 26) much to the pleasure of the agricultural, mining and oil and gas sectors.

“I am pleased to announce that we’ve reached a tentative agreement with CN. I would like to thank our members for their incredible courage and solidarity,” said François Laporte, the president of Teamsters Canada. “I would also like to thank all the Teamster local unions from across different industries, all the labour organizations and members of the public who supported us on the picket line.”

In its press release, CN thanked customers around North America for their patience during the week long train stoppage. The newly struck tentative deal will see CN employees back to work Wednesday morning.

Shares of Canada’s national freight carrier rose 3 percent following the announcement to sit at C$122.72.

Nutrien’s shares were slightly lower Tuesday, trading for C$62.37.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.