Northern Silica will be ceasing operations effective immediately and laying off the majority of its staff.
The company made the announcement earlier this week, just over a month after re-opening and temporarily laying off its employees for a month over Christmas. Only about half of its staff came back to work on the day-shift in early January.
“It’s not dissimilar to what we said in December, the market for the product that we make isn’t very good right now,” said Scott Broughton, president and CEO of Northern Silica.
“When we started up again in January it was on the basis that the first quarter would be stronger than it’s shaping up to be and we just had to make the decision that we can’t weather this, so we’ve had to go into full closure and layoff.”
The Northern Silica plant, located just north of Golden in Moberly, involves an integrated mining and procession operation, which produces approximately 300,000 tonnes of premium frac sand every year. The product, named “Mount Moberly White” was sold as a proppant, which is often used as a part of the process of hydraulic fracturing, more commonly known as “fracking.”
The decline of the fracking market is one of the primary reasons why Northern Silica has had to shut it’s doors, with an uncertain future for the market due to continued pipeline disputes and the current downturn of the oil patch, according to Broughton.
The silica found in Moberly has properties that lend itself to other products as well, with Broughton mentioning the potential for high-grade glass used in solar panels as a product that they could use to diversify the company and potentially re-open its doors one day.
“Our challenge is we haven’t done enough leg work on that,” said Broughton. “The research has been going on for a few months now, sadly we haven’t been able to make that happen fast enough to preclude the layoffs we just did. We are optimistic that one day we can fire it all up again.”
A few employees will remain on to assist in the closure of the mine. There are many high- and low- tech appliances that need to be maintained and water lines need to be kept running in order to ensure that nothing freezes and causes major damage.
There are also a few maintenance requirements in order to maintain the standards of the permits that Northern Silica had required to operate.
“We have a few people who are going to remain out in Moberly to focus on test work and trials and to see if we can make different products to sell,” said Broughton. “Hopefully we realize good value for the material, which I think is the future and the direction of where it’s going to go in Moberly in the future.”
Broughton also took the time to thank his employees for their commitment over the years.
“I can’t thank our workforce enough, it’s such a sad event,” he said. “It’s really bad timing, but we are working hard right now to try and diversify and to start thinking about re-opening as soon as we can.”
While there’s no firm timeline on a potential re-opening, Broughton said it would be at least six months if not longer, before Northern Silica will be ready to re-open – it all depends on the market.