Canada minister says BHP deal would favor Australia

Thu Nov 4, 2010 2:33pm EDT
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By David Ljunggren

OTTAWA (Reuters) - Canada's farm minister, in comments his office later insisted were speculative, said on Thursday the proposed takeover of Potash Corp would have given Australia's agriculture industry too much of an advantage in markets such as India and China.

Ottawa shocked markets late on Wednesday by blocking a hostile $39 billion bid by Anglo-Australian mining firm BHP Billiton for Potash -- the world's biggest fertilizer producer, based in the western province of Saskatchewan.

Agriculture Minister Gerry Ritz, who is also the political minister for Saskatchewan, told the House of Commons that the takeover would have been too beneficial for Australia.

"Having someone different mine it (crop nutrient potash) certainly does make a difference in that Australia is a major marketer of a lot of the same foodstuffs that Canada is. We're a volume producer -- so are they," he said.

"And for them to be able to go to the Indias and Chinas of the world and say 'We now control your fertilizer too' I think would have had a very detrimental effect. And I know the ministry of industry took all of that under advisement and it helped ... formulate the decision."

Ritz's comments came as something of a surprise since he spoke only a few minutes after Industry Minister Tony Clement explained that under the terms of the Investment Canada Act, he was obliged to keep his reasons for denying BHP silent until the end of a 30-day review period.

Ritz's office later issued a statement of clarification, which said "any speculations on the factors that were considered is purely speculation".

China and India are coveted markets for crop exporters. Both nations have growing incomes and populations, factors that boost demand for the feed grains that are necessary to produce more meat-rich diets.   Continued...