Potential mine shutdowns for Nutrien Ltd.

Arising from the merge of Canadian giant Saskatchewan Potash Corporation and Agrium in 2017, Nutrien Ltd (TSX: NTR) announced considering the possibility of closing one of their six potash mines.

Yet, the merge has been very beneficial to the company. They forecast $500M in savings due to the generated synergy between the two parts (Financial Post, 2018). These savings are possible because of redundant costs existing for each individual entity, which are now useless.

Nonetheless, according to CEO Chuck Magro, Nutrien Ltd is not ruling out closing one of the six potash mines in the country if product demand decreases. The demand is currently still high ennough and there is no question of shutting down a mine which would be leaving many Canadians unemployed. One concerning factor for Nutrien Ltd is NAFTA and its many possible legislation modifications regarding United States product import such as fertilizer.

It is thus apparent that not everything is going wrong for the company now that its potential savings due to the synergy should allow it to finance the costs of projects ensuring good future rentability. Nutrien went public on January 2nd, 2018, with an initial stock price of $65.23. As of February 13th, 2018, the individual stock was priced at $56.34, a 14% drop in value in slightly more than a month.

Bibliography

FRIEDMAN, G. (February 6th, 2018). Potash demand ‘robust’, but Nutrien CEO doesn’t rule out closing higher cost mines. The Financial Post. From http://business.financialpost.com/commodities/mining/nutrien-potash-demand-robust

Nutrien. (2018). What we do. Retrieved from : https://www.nutrien.com/what-we-do

Financial Post. (2018). Five things you need to know before you start your day on Feb. 7. Retrieved from : http://business.financialpost.com/executive/five-things-you-need-to-know-before-you-start-your-day-on-feb-7

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