Editorial: Potash producers reel

The mining industry in this country, heavily dependent on export mar kets, is unquestionably hurting, though hardly as sorely as is the oil and gas sector. Root of the malaise is the fierce foreign competition now coming from all directions and flooding most of our markets save that for gold.

A classic case is that of iron ore. Just a few years ago we had 15 producing mines that turned out 60 million tons annually worth $1.4 billion, making this country the world’s top iron ore exporter. Today there are but six, all struggling to survive in a glutted world market.

And now our once-booming western potash mines are suffering much the same fate. Another glutted world market, brought on by over-capacity, has our nine producers reeling. These are all big mines and very good ones, with huge ore reserves and in which many hundreds of millions of dollars have been invested. Last year they shipped more than 10 million tons of product valued at some $650 million, employing 4,000 full-time and well- paid workers.

With these markets glutted and world demand slackening (because the poorer nations that most need potash simply can’t afford to buy it), the price of potash has fallen drastically — from more than $100 a ton in 1979 to just over $50 today. As a result, our Canadian mines are all just limping along well under capacity, with excessive inventories on hand just begging for markets.

And now comes another and more ominous threat. And this from our big and friendly neighbor to the south. For Uncle Sam is now talking about imposing countervailing duties, claiming that Canada is dumping its potash into that country at prices lower than in other countries. This U.S. market, to which 60% of our potash exports are directed, is absolutely necessary for the very survival of the industry.

Nor is it just the threat. For there are also dark clouds emanating from the Soviet Union and certain Middle East countries which are dumping and undercutting the potash markets to gain foreign exchange dollars at prices that bear little relationship to their cost of production.