July 31, 2015 / 6:59 PM / 2 years ago

Don't fear potash takeover, Saskatchewan premier tells Germany

Chris McKay, PotashCorp load-out supervisor at the Cory Mine, examines potash inside one of the storage facilities near Saskatoon, Saskatchewan October 10, 2013.David Stobbe

(Reuters) - The man who was instrumental in blocking a foreign takeover five years ago of Canada's Potash Corp, the world's No. 2 producer of the crop nutrient potash, says Germany need not fear Potash's move to buy German potash miner K+S AG.

In 2010, Brad Wall, premier of the Western Canadian province of Saskatchewan, campaigned against Anglo-Australian miner BHP Billiton's bid for Saskatchewan-headquartered Potash Corp, saying BHP would market potash differently if it succeeded, resulting in lower prices and less revenue for the province.

Saskatchewan is one the world's biggest sources of potash.

Wall said the situation isn't the same if Potash Corp buys K+S, the world's No. 5 potash miner.

"The difference is we were talking about a company that controlled almost a third of the world’s potash resource that was in play," Wall said in a telephone interview from Prince Albert, Saskatchewan on Friday. "K+S certainly is not that company."

While new mines are under construction in Saskatchewan, potash reserves are being depleted in some of K+S's German mines, he said.

K+S this month rebuffed Potash's proposed 7.9 billion euro ($8.7 billion) takeover bid as too low. It also suggested that Potash would cut German jobs and close mines.

In the interview, Wall also said that upcoming changes to potash-mining taxes in Saskatchewan will be revenue-neutral and that capital-spending incentives will be maintained.

The changes will put greater emphasis on production than the current formula and less on price, he said.

"We really are the OPEC of potash in terms of volumes," Wall said. "The province should act like it."

CHINA URANIUM CONCERNS

Saskatchewan, also a major source of uranium, would have "real concerns" if a Chinese company sought to become majority investor in a uranium mine because Canadian companies don't have the same opportunities in China, Wall said.

In June, Canada made a rare exception to its policy of requiring uranium mines to be majority-owned by Canadian companies, approving an application by Australia's Paladin Energy.

Wall has urged Ottawa to allow more foreign uranium investors, but isn't sure about China. China General Nuclear Power Group and China National Nuclear Corp, have both said in recent months they are looking at Canada for acquisitions.

"We would have real concerns about the reciprocity question (with China)," he said.

Wall, one of Canada's most popular provincial premiers, said he was not interested in seeking the leadership of Canada's federal Conservative Party.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Peter Galloway

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