Thank you for attending today’s meeting which continues our commitment to keep you and your colleagues informed of the challenges facing the Company and the measures we need to put in place to meet the operational and market conditions we face and to secure the future of the business.
First of all we want to put on record our appreciation of the hard work, support and understanding of you and your colleagues in implementing the very significant on-going changes we have had to make.
Today we are outlining the next phase of meeting the realities that are driving the changes; the fact that reserves of economically-accessible potash continue to decline and our long-term viability is dependent on the transfer to Polysulphate production.
The business has incurred significant losses in the last year, underlining the need for us to make the move to Polysulphate as soon as possible.
As was first announced two years ago, our potash reserves are close to their end. In view of both operational and market conditions we propose ceasing potash production by the end of June 2018. This would involve concentrating on the final stages of potash production in order to benefit from the buoyant period for sales in the UK market, at the same time as completing the measures needed to ensure that we can meet the required production rates when we make the move to Polysulphate.
This will include a range of projects, modified mining operations, underground infrastructure, surface crushing and screening capacity and PotashpluS capacity.
Although you will notice some necessary changes in the coming weeks we are committed to consulting with a view to reaching agreement on ways and means of avoiding redundancies, reducing the number of redundancies and mitigating their consequences.
With support from ICL we are continuing to develop the Polysulphate market and we will also maintain salt production since it is our route to future mining areas as well as being of national importance.
As we have previously made clear, the transition to Polyhalite will continue to have an impact on workforce numbers. At this stage we cannot be give a precise figure, we believe job losses are likely to be in the region of 230 by the end of June whilst we want to keep numbers to a minimum, it is anticipated that most areas of the business will be affected.
We will be starting consultation with the recognised trade union and during that process we will examine how we can achieve the changes needed to ensure the Company’s future with the least impact on staff. We would welcome any views which may assist in dealing with what is a very difficult situation. Until we have properly and fully consulted with the trade union representatives, no decisions will be finalised.
Following collective consultation, we will consult individually with all employees who may be affected by redundancy. We do understand that this is a difficult situation and we are committed to keeping the numbers of roles affected by the redundancy situation as low as we reasonably can and to do everything possible to provide support for all staff. We will make you all aware of any available vacancies within the ICL group. Where we are unable to redeploy redundant individuals into suitable alternative employment, support will be provided to help find employment elsewhere.
Given the fact we have made this announcement, but do not anticipate ceasing potash production fully until the end of June, this process of restructuring is likely to take some time to complete. We appreciate your understanding and patience on this matter.
It is never easy having to consider these kinds of measures. This is of course not the first time most will have been involved in such a process but that does not make this any easier. We believe however that we have to act in order to secure the long-term future of the Company in the light of economic and operational pressures we face. We are committed to doing everything possible to ensuring that the mine has a sustainable future and continues to make a major contribution to the local community.
Thank you for attending today. We appreciate that you will have concerns and questions and will keep you fully informed as things move forward.
We will reintroduce the Q&A process which in previous processes proved to be a successful way of keeping our staff informed regularly throughout the process.