Faithful reader R. Potter, who lives in New Brunswick, shares his thoughts on BHP Billiton's failed takeover of Potash Corp. of Saskatchewan. He raises interesting questions.
"The emotional and political aspects of the BHP Billiton offer to purchase PotashCorp have received a great deal of attention in the past few days. Unfortunately, very little has been said about the technical-legal aspects of this proposed takeover.
"All of us who are now or have been in the past associated with the mineral industry in Canada know the provinces own their mineral resources. A typical clause in mining legislation would be "all minerals are property separate from the soil and ownership is vested in the Crown." The only exception might be very old land grants where the owner was granted both surface rights and mineral rights. The administration of legislation related to exploration and mining of mineral resources is the responsibility of a Minister of the Crown who acts on behalf of the people of the province. The Crown retains ownership of the minerals mined and processed and is reimbursed by a taxes based on profits or a royalties based on units of production.
"The government of Saskatchewan has indicated it will loose control over the potash resources if PotashCorp is sold to BHP Billiton. I do not understand why Saskatchewan will loose control of something it still owns and administers. It would be beneficial to receive an explanation for the stated loss of control, loss of jobs and forecast loss of revenue.
"What may happen if the sale of PotashCorp does not take place? Will BHP Billiton use its financial resources to explore, develop or purchase potash properties elsewhere in the world? No one has a monopoly on anything forever, and if this happens, BHP-Billiton could be in competition for PotashCorp for market share sometime in the future.
"Hopefully we may soon obtain answers to these and many other questions related to this proposed purchase of PotashCorp by BHP Billiton."
Comments
Jim Connor
“A typical clause in mining legislation would be “all minerals are property separate from the soil and ownership is vested in the Crown.””
This is true until someone lays legal claim to the minerals ( Staking Claims ). Once claims are staked only the claim holder has the legal rights to the mineral. The Gov’t no longer has any legal rights to the minerals but in law could retain a royalty. Most mines are on Crown land so the Gov’t still has some control because you have to use crown land to mine.