UPDATE 3-Potash Corp restarts one of striking mines

Tue Aug 26, 2008 2:56pm EDT

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(Adds comments from union)

By Roberta Rampton

WINNIPEG, Manitoba Aug 26 (Reuters) - Managers at Potash Corp of Saskatchewan (POT.TO) restarted operations at the fertilizer giant's Allan mine on Monday, the largest of three potash mines where workers have been on strike since Aug. 7, a spokesman said on Tuesday.

The company has not determined how much potash it will be able to produce from two shifts at the mine, which normally runs on four shifts, spokesman Bill Johnson said. The Allan mine produced 1.744 million tonnes of potash in 2007, or 19 percent of the company's total output.

"We're in the business of supplying the world with fertilizer inputs, and we intend to do that to the best of our ability while the union leadership keeps its members out on strike," Johnson said in an interview.

It is still too soon to gauge whether the strike by about 500 mine workers, members of the United Steelworkers union, will affect Potash Corp's ability to meet its sales commitments, Johnson said.

Potash Corp is still evaluating contingency plans for the other two striking mines at Cory and Patience Lake, Saskatchewan, he said.

Steve Hunt, a spokesman for the Steelworkers, said he had not heard directly from Allan about the status of its production.

"I don't imagine they're doing very much," he said.

The strike comes during a seasonal lull in fertilizer sales, but Potash Corp has said the action affected its industrial customers, accounting for about 5 percent of sales.

Together, the three mines account for about 6 percent of world potash capacity, creating concerns about shortages and price spikes because of strong demand and tight supplies of the nutrient, which is used to boost crop yields.

No talks are scheduled with the union, Johnson said. Fertecon Ltd, a prominent fertilizer consultancy, has said the strike could begin to push up world prices if it lasts beyond mid-September.

Expansion projects at all three mines have been "minimally impacted," the company said, noting the projects are on schedule.

Potash Corp shares were up 0.6 percent at C$187.18 on the Toronto Stock Exchange on Tuesday.

($1=$1.05 Canadian) (Reporting by Roberta Rampton, additional reporting by Cameron French in Toronto; editing by Rob Wilson)

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