Saskatchewan won't review potash tax until BHP mine decision

Tue Dec 18, 2012 1:38pm EST
 
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* BHP board to decide on Jansen mine by mid-2013

* Province fears new production could hurt prices

* Saskatchewan's potash taxes are highest in world

By Rod Nickel

WINNIPEG, Manitoba, Dec 18 (Reuters) - Saskatchewan, the world's richest potash-producing region, will not review how it taxes miners of the crop nutrient until late next year at the earliest as it waits to see if BHP Billiton PLC follows through on plans to develop a huge mine in the Western Canadian province.

"We're going to monitor the market behavior, and if there's change in the market structure we'll take a look at that," Kent Campbell, Saskatchewan's deputy minister of energy and resources, said in an interview with Reuters. "If there's a whole bunch of production that comes on, that could change the nature of the market.

"The BHP decision is obviously a big one."

Potash taxes in Saskatchewan are the highest in the world, according to Campbell, with producers Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc collectively paying hundreds of millions annually.

Those companies are investing billions in mine expansions, while new players such as BHP and Germany's K+S AG are doing preliminary digging on Saskatchewan's first new potash mines in 40 years. With crop prices surging in 2008 and again this year on bullish outlooks for food demand, potash has attracted new interest for its ability to boost crop yields.   Continued...