01/19/2016 07:21 EST | Updated 01/19/2017 00:12 EST

PotashCorp suspends Picadilly mine in N.B., cutting 430 jobs

Potash Corporation of Saskatchewan is indefinitely suspending its Picadilly mine operation near Sussex, N.B..

The move is expected to result in the loss of 420 to 430 jobs.

Jochen Tilk, PotashCorp president and chief executive officer, said in a statement released Tuesday it was "a very difficult day for our employees and our company."

"While these are important steps in running a sustainable business and positioning the company to best meet the needs of its many stakeholders over the long term, such decisions are never easy," his statement said.

"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."

The company said a core crew of about 35 will be kept on at Picadilly for care and maintenance of the operation.

The company said more than 100 open positions in its Saskatchewan operations will be available to New Brunswick employees, along with relocation assistance.

Capital savings for Potash

The company said the suspension of its New Brunswick operation will allow it to:

- Improve production at lower-cost operations.

- Save money on capital expenditures.

- Maintain long-term flexibility.

- Preserve company jobs over the long term.

"We expect to increase our competitiveness and reduce cost of goods sold by $40 [million]-$50 million, which will be offset by severance and transition costs.

PotashCorp says the suspension will also eliminate $50 million in capital spending this year and another $135 million in 2017-18.

The company's international customers who were historically served by the New Brunswick operation will now be served from Saskatchewan through Canpotex.

PotashCorp's storage and loading facilities at the port in Saint John will be made available to Canpotex.

The annual cost of care and maintenance at the Picadilly mine is estimated at $20 million in 2016 and $15 million in subsequent years.

The company said if it ever decides to resume production in New Brunswick, it will take about one year to get the mine back in operation.

New Brunswick employees who do not remain at Picadilly or choose not to relocate to Saskatchewan will be given severance and assistance packages.

PotashCorp said it will establish a $5-million fund to:

- Help employees with job transition assistance, including skills training and education support.

- Provide financial support to local business.

- Support local charities.