Mining contractors and workers are feeling the heat as the global steel market witnesses a slowdown. This is adversely affecting operations of mines across the world. In the UK, the country’s sole potash mine is reeling under diminishing reserves and plummeting prices. As a result, the mine will be reducing its workforce.
Boulby Mine, which is located near Redcar, will be slashing up to 140 jobs. This decision comes as more bad news for the local community, as in 2015, the steel plant in the area closed doors, laying off 3,000 workers.
The potash mine is operated by ICL, which said that it was going to apply to the relevant authorities to extend its licence for the mine for another 40 years. The mining contractor already has an existing licence to mine in the North York Moors National Park. The licence for this project expires in 2023.
ICL has a workforce of 700 miners, but it announced in November 2015 that it would be laying off 220 miners and getting rid of 140 mining contractors.
The global price of potash has fallen nearly 40 per cent since the early half of 2015. As a result, ICL has decided to slow down the potash extraction process. The company is instead focusing on polyhalite, which is another form of potassium. However, polyhalite has other substances that aid in the growth of plants and hence is more valuable as a fertiliser ingredient compared to potash.
ICL Executive Vice President for Potash Peter Smith stated that the company had already announced in November that it would be restructuring its business as the mining of potash was no longer a commercially viable operation. Smith said that ICL would be concentrating on mining polyhalite, also known as polysulphate, and intends to gainfully employ the local community in which it operates.
However, all is not lost for the miners being laid off. Sirius Minerals is looking to commence construction of its polyhalite mine in the next few weeks. This mine is located south of Boulby. In July 2016, the company stated that it had nearly raised the required finance and was looking to start the construction in September.