K+S eyes wide cost cuts after potash uncertainty
German miner K+S, hit by uncertainty over the price of potash fertiliser, is looking into cutting its annual costs by hundreds of millions of euros, two people familiar with the discussions told Reuters on Friday.
Shares in K+S have lost more than 30 percent of their value alongside global peers after one of the world's two large potash cartels collapsed in July, stoking expectations of a slump in prices of the key fertilizer mineral.
The supervisory board of K+S is discussing measures at a meeting on Friday that could amount to cost cuts of less than 400 million euros ($550 million), one of the people said.
The company has annual costs of close to 3 billion euros, about 900 million of which are for personnel expenses.
K+S declined to comment. It has said it would publish more details on the cutbacks on Nov. 14, when it is due to release third-quarter results.
K+S, the largest independent potash supplier outside the former Uralkali-Belaruskali pact and a Canadian alliance around Potash Corp of Saskatchewan, said in August it would step up efforts to cut costs in anticipation of lower prices for its fertiliser minerals.
Russia's Uralkali, which has abandoned an export joint venture with Belaruskali, had predicted a decline of more then 25 percent in the potash price to below $300 per tonne.
It remains unclear whether rival Uralkali and Belaruskali will settle their dispute and resume joint shipments, which would bolster potash prices, but Uralkali has recently retracted its previous outlook of potash prices below $300 per tonne, saying robust demand would lead to prices above that level.
In response to its limited German reserves, the Germany company is preparing to expand in Canada.
It has remained committed to the C$4.1 billion ($3.9 billion) investment and plans to bring a new mine on stream there in 2016 even after uncertainty over potash prices upset its previous funding plans.
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