Brad Wall, the Premier of Saskatchewan, gave his official response to the BHP Billiton hostile takeover of PotashCorp. His official response is ‘no’. Premier Wall can not stop the deal himself, but the deal still has to get federal approval which will look very carefully at the Premier’s position when coming to a decision.
- Jobs
- Jobs at the other potash companies thinking of expansion in Saskatchewan could be put at risk if BHP decides to go into full production.
- The future of Canpotex is at risk if BHP does decide not to use them for marketing.
- BHP has said they are going ahead with a mine at Jansen Lake, which should be viewed as new investment and new jobs in the province.
- Royalty and Taxation Revenue for Saskatchewan
- Full production from BHP could result in a 60% drop in prices and up to $570 million dollar loss annually due to oversupply. This could add up to 3 to 6 billion dollars.
- Strategic Interests of Saskatchewan
- There is no benefit to Saskatchewan to give control of 20% to 30% of the worlds potash to a company that is not specifically dedicated to the product.
- Saskatchewan and Canada loose a Canadian company and loose leverage in the potash sector.
- Potash will only become more valuable as the world continues to feed its population.
In the end, Brad Wall does not see the BHP Billiton takeover as a ‘net benefit’ and thus gives a resounding ‘no’ to endorsing the deal.
Brad Wall’s entire speech transcript can be found here.
Brad Wall is standing up for Saskatchewan’s future. We can hope the federal government takes his advice and does not allow another foreign giant to gobble up a Canadian mining company. Foreign companies have made many promises when buying Canadian companies, but they often break their promises when profit gets in the way. It seems they can not be held to their promises in the long run. That is where Saskatchewan and Canada suffer.
Saskatchewan needs to keep growing and prospering and part of that is keeping the leverage we currently have in our valuable potash resource. Other countries are not keen on letting control of their natural resources slip away from them, and neither should we.
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