Canada province says its BHP-Potash stance is firm

Mon Oct 25, 2010 5:35pm EDT
 
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) - Saskatchewan's opposition to BHP's bid for Potash Corp is based on the conviction that a takeover would hurt the Canadian province, its top elected official said on Monday, not on the hope of squeezing concessions out of BHP.

The home province of the world's largest fertilizer supplier is recommending that the federal government block a $39 billion bid by BHP Billiton, the Anglo-Australian mining giant. It says a takeover would provide no net benefit to the country and will cost Saskatchewan revenue, jobs and strategic influence over a key commodity.

Potash Corp mines most of its potash in Saskatchewan, where it also has a head office.

"This isn't a bargaining position that we've come to," Premier Brad Wall said in an interview with Reuters. "It's our position and that's what we're going to advocate for."

Wall dispatched two of his cabinet ministers to Ottawa on Monday to begin lobbying politicians and government officials to reject the deal. Ottawa is scheduled to make a decision on whether to allow the takeover bid to go ahead by November 3.

BHP spokesman Ruban Yogarajah declined to comment on whether the company will make a new approach to Saskatchewan before the deadline or on the government's review of the deal.

Saskatchewan's most immediate concern is the potential loss of C$3 billion to C$6 billion ($2.9 billion to $5.9 billion) over 10 years. That's how much the province says it could lose in taxes and potash royalties if the takeover proceeds. The losses would result from expected changes in how BHP would produce and market potash, and how it could capitalize on the province's tax laws.

BHP has offered to find ways to ensure Saskatchewan doesn't lose revenue, but Wall has said that preventing a foreign takeover is also of strategic importance to Canada.   Continued...