Canadian Mining Journal

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MERGER: Conference Board report on BHP offer fails to sway Potash Corp

SASKATOON - Potash Corporation of Saskatchewan continues to resist the takeover efforts of BHP Billiton follow...


SASKATOON – Potash Corporation of Saskatchewan continues to resist the takeover efforts of BHP Billiton following the release of a report compiled by the Conference Board of Canada. The report noted little benefit to Canada if the deal succeeds. Instead it noted that the Saskatchewan government might lose at least $2 billion in royalty revenues during the next decade. Such a loss would be triggered by BHP Billiton’s writing off development costs at its Jansen Lake potash project against the PotashCorp bottom line.

The $2-billion figure is understated, PotashCorp said in a news release Tuesday. The Canadian company added that BHP has said publically it will operate at peak capacity, but that the Conference Board report neglected to take into account the economics of a full production scenario.

To maintain revenues for the province, PotashCorp has made the following suggestions to all interested parties:
? Support Canpotex’s offshore potash sales.
? Purchase potash on an arms-length basis.
? Support PotashCorp’s existing management’s plans to maximize profits and guide future expansions.

PotashCorp says it told the Conference Board that the aforementioned suggestions would integral to any alternative expressions of interest, but the company’s view was ignored.

Investment Canada continues its investigation into the takeover.

More information about the offer is posted at www.PotashCorp.com and www.BHPBilliton.com.