July 28 (Bloomberg) -- United Steelworkers union members walked out of Potash Corp. of Saskatchewan Inc.'s Cory mine to set up a picket line and press for contract demands.

``We're doing a one-day study session, which translates into a one-day rotating strike,'' Roger Falconer, the head of the union's strategic campaigns unit, said today by telephone. One-day strikes may follow at two other Potash Corp. mines.

Union members at Cory, about 6 kilometers (4 miles) west of Saskatoon, Saskatchewan, are among about 500 workers at three mines demanding better pay and benefits as profit soars from sales of crop nutrients. The union says the company earned about $300,000 per worker in the first half of 2008. Potash Corp. reported first-half net income of $1.47 billion.

The job action has ``significantly slowed'' normal operation of the mine, which was being restarted after two weeks of scheduled maintenance, company spokesman Bill Johnson said today in a telephone interview.

The walkout began less than a week after the company, the world's largest producer of potash, a form of potassium, said second-quarter profit more than tripled to $905.1 million. Earnings soared as prices more than doubled.

The average North American selling price for potash jumped to $403.03 a metric ton in the second quarter from a year earlier, the company said on July 24. Prices outside North America climbed to $416.93 from $142.56 a ton.

Disrupting Production

``There's no question in our minds that rotating strikes will disrupt production,'' Falconer said yesterday. The three mines, including the Patience Lake and Allan sites, generated 30 percent of potash output last year, the company says on its Web site.

Potash Corp. fell C$3.47, or 1.7 percent, to C$202.42 at 4:10 p.m. in Toronto Stock Exchange trading. The shares still have more than doubled in the past year.

While no formal negotiations have been scheduled, Potash Corp., which also produces phosphates and nitrogen-based fertilizers, is willing to talk with union representatives, Johnson said yesterday.

Chief Executive Officer Bill Doyle, who last week described the company's ``final offer'' to the union as ``absolutely extraordinary,'' said he would not repeat the mistakes made by companies in other industries.

``We will not become a high-cost producer of potash,'' Doyle said on a July 24 conference call with analysts and investors. ``We don't want to end up like one of the airlines or a Detroit automaker, which lost their way and became uncompetitive.''

One-Day Minimums

Alternating strikes at each of the three targeted mines will last a minimum of 24 hours, Falconer said. The union said issues besides wages include control over contracting out work, vacations and pensions.

The workers have been without a contract since the end of April, he said. In a statement today, the union said representatives have met with Potash Corp. about 40 times since the contract expired in April.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net

Last Updated: July 28, 2008 16:18 EDT