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Potash Corp strike drags on as union seeks support

TORONTO, Aug 15 (Reuters) - A strike at three Potash Corp POT.TO mines has entered its second week with no talks on the horizon, and the union said it will seek support from locals at other nearby potash mining operations.

A spokesman for the United Steelworkers, which represents workers at the three Saskatchewan mines, said the union will encourage workers at other mines owned by Potash, Agrium AGU.TO and Mosaic MOS.N in the province to refuse working voluntary overtime and not do things outside the strict boundaries of their collective agreements.

“It could be things like that (overtime), or where the guys go the extra mile to help out, they just won’t. These people keep the places running,” said USW spokesman Steve Hunt. He said they would not encourage any illegal slowdowns.

About 500 workers at the Cory, Allan, and Patience Lake mines walked out last Thursday after mediated talks broke off over wages. The three mines account for 30 percent of Potash Corp’s production and about 6 percent of global output.

Output at the Cory mine was halted, while Allan and Patience lake were already down for maintenance. Allan was to have restarted last Monday.

Maintenance work at Patience Lake has been stopped, and the union said contractors have partially stopped work on a C$110 million expansion there.

TIGHT SUPPLY

The strike threatens to squeeze supply in an already tight potash market, which could drive up prices that have already risen sharply year-over-year.

Potash is one of three nutrients farmers apply to their soil to boost crop yields.

Company spokesman Bill Johnson said he wasn’t sure if the strike had yet had an impact on shipments, either from Potash Corp or from Canpotex, which markets potash for Canadian producers.

“It’s early days in this strike. An extended strike would have an impact on Canpotex shipments, but it’s too early to tell right now what’s going to happen with this work stoppage,” he said.

He wouldn’t comment on inventory levels at the three mines affected by the strike.

One analyst said he expected a prolonged stoppage, even though Potash Corp will then miss out on sales at high prices.

“I think that the company will hold out for quite some time,” said David Riedel, an analyst at Riedel Research Group.

“We believe that the prices will stay high for the medium-term so they can enjoy the high prices after the unrest is settled.”

Both sides said a sticking point was the union’s demand for a bonus tied to the price of potash.

The union says this would give employees a share of profits -- Potash Corp earned $905 million in the second quarter -- while allowing the lower payrolls when prices fall.

The company says its offer of wage increases of 27 to 35 percent over three years would make Potash Corp’s miners the highest paid in the industry.

The stock has been retreating since the dispute began.

The shares were down 5 percent at C$180.42 on the Toronto Stock Exchange on Friday. ($1=$1.06 Canadian) (Reporting by Cameron French; editing by Janet Guttsman)

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