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Over 400 jobs lost as PotashCorp suspends New Brunswick potash operation

Click to play video: 'PotashCorp New Brunswick operations suspended' PotashCorp New Brunswick operations suspended
WATCH ABOVE: Economic conditions have forced Saskatchewan-based mining giant PotashCorp to suspend its operations in New Brunswick indefinitely. Ryan Kessler finds out what that signals to the industry – Jan 19, 2016

Calling it a difficult but necessary step, Potash Corporation of Saskatchewan (PotashCorp) announced Tuesday it will be suspending potash operations in New Brunswick.

The move, effective immediately, will result in a workforce reduction of 420 to 430 at the Saskatoon-based company’s operation at Picadilly, N.B.

“This is a very difficult day for our employees and our company,” said PotashCorp president and CEO Jochen Tilk.

“We understand the significant impact to our people in New Brunswick and the surrounding communities, and are committed to helping those affected through this challenging time.”

PotashCorp President Mark Fracchia said Tuesday the price of operations at the Picadilly site was “significantly higher than western operations.”

Company officials said more than 100 jobs in Saskatchewan will be made available to those affected by the shutdown. About 35 core employees will stay on at the Picadilly location in Sussex.

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WATCH BELOW: N.B. mayor says the closure of the Potash operation is “devastating” and “heartbreaking”

Click to play video: 'Sussex Mayor Marc Thorne – Potash Mine' Sussex Mayor Marc Thorne – Potash Mine
Sussex Mayor Marc Thorne – Potash Mine – Jan 19, 2016

The mine only opened in October, after PotashCorp permanently closed the Penobsquis mine.

Just one month later in November, the CEO of Potash said there would be no job cuts despite the worsening economy.

“It’s terrible for the town and devastating for the province,” said Sussex Mayor Marc Thorne.

PotashCorp said it will also establish a $5-million community investment fund for job transition assistance, to help local businesses and support charities.

WATCH BELOW: PotashCorp spokesperson Randy Burton on job cuts in New Brunswick

Click to play video: 'RAW: PotashCorp on job cuts in New Brunswick' RAW: PotashCorp on job cuts in New Brunswick
RAW: PotashCorp on job cuts in New Brunswick – Jan 19, 2016

The rationale for the move, said company officials, is to optimize production to lower-cost potash operations and preserve jobs across the company in the long term.

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The company expects that by optimizing production, they will increase their competiveness and reduce the costs of goods sold this year by $40- to $50-million, which will be offset by severance and transition costs.

READ MORE: PotashCorp fined $280K after worker killed at Cory mine

Customers who were served by the New Brunswick operation will now get the potash from the company’s Saskatchewan operations.

WATCH BELOW: Federal ministers address 400 jobs lost as PotashCorp suspends New Brunswick potash operation.

Click to play video: 'Federal ministers address 400 jobs lost as PotashCorp suspends New Brunswick potash operation' Federal ministers address 400 jobs lost as PotashCorp suspends New Brunswick potash operation
Federal ministers address 400 jobs lost as PotashCorp suspends New Brunswick potash operation – Jan 19, 2016

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