A POTASH firm forced to cut hundreds of jobs amid dwindling reserves has been hit by a £3m bill from its shock find, The Northern Echo can reveal.

Israel Chemicals Limited (ICL), which runs a fertiliser mine at Boulby, east Cleveland, has been rocked by a $4m (£2.7m) write down across its global activities.

The loss comes after tests found Boulby’s potash stocks are close to exhaustion.

Officials at Boulby, which operates under the ICL UK moniker, are switching their attention to the fertiliser polyhalite, which experts say has numerous nutrients needed for strong crop growth, to mitigate the loss.

However, according to ICL’s results for the first quarter to March 31, a weaker selling market, predominantly across the potash sector, and its Boulby changes, has impacted on progress.

Stefan Borgas, chief executive, said total, reported operating income was 66 per cent worse off at $107m (£74m) and adjusted earnings before interest, taxes, depreciation and amortization were lower at $223m (£154m) from $354 (£244m).

In the UK, Mr Borgas said sales stood at $98 (£66m), compared to $106m (£73m) a year ago, adding they accounted for eight per cent of total deals.

He said: “An increase in depreciation expenses, in the amount of approximately $4m, stemmed mainly from acceleration of the depreciation of ICL UK due to the update on potash reserves last year.

“The decrease in potash sales stems primarily from a decrease in quantities sold and a decline in prices.

“The slowdown in the global economy continued to challenge the business environment and crop commodities declined further during the first months of 2016, weighing heavily on farmers’ decisions to take positions on fertiliser volumes.

“The potash market is adversely affected by the delay of 2016 contracts with China, which is usually a trigger for other markets and sets a price benchmark.”

Bosses at Boulby last year revealed 700 posts were under threat after investigations showed potash reserves would be expended in three years.

Around half the figure, made up of ICL staff and contractors, are now understood to have left, while the remaining half are expected to be released in 2018 when stocks are fully exhausted.

To lessen the shortfall, the business, which officials say will remain east Cleveland’s largest employer despite the changes, will mine polyhalite.

Marketed as polysulphate, the company is already building a factory to process the mineral.

The firm, known locally as Cleveland Potash, previously said it hopes to be annually mining about three million tonnes of polyhalite after 2020, which will be complemented by its ongoing annual extraction of around half a million tonnes of road salt.

Officials say the polyhalite work will require fewer staff because it is simpler to mine than existing potash.

The company is also looking into extending the mine’s life by another 40 years, which Phil Bedford, head of engineering, told The Northern Echo will give the company’s Israel-based hierarchy real assurance to invest in the site.

He added: “We are creating a future; ICL wants us to stay in the area for a long time.

“We are doing all we can to give us longevity and safeguard jobs for years to come.

“That will build a business that can go on from 2018 mining polyhalite and salt.

“We are trying to set up a business for the next ten, 20, 30 and 40 years.

“We want to see more people going through to landmarks, such as 25 years’ service, including people who have not even started with us yet.”