Potash Corporation of Saskatchewan
Encyclopedia
The Potash Corporation of Saskatchewan Inc. , also referred to as PotashCorp, is a Canadian corporation based in Saskatoon
, Saskatchewan
. The company is the world's largest potash
producer and the third largest producers of nitrogen and phosphate, three primary crop nutrients used to produce fertilizer. At the end of 2010, the company controlled 20% of the world's potash production capacity, 2% of nitrogen production capacity and 5% of phosphate supply. The company is part-owner of Canpotex
, which manages all potash exporting from Saskatchewan
.
It is by far the world's largest producer of potash, producing 20% of the world's supply. It is also the world's largest fertilizer
producer, the third largest phosphate
producer and the third largest nitrogen
producer.
The Saskatchewan potash industry began in the 1950s and 1960s. The government saw it as a promising new field and granted large subsidies to the new projects, mainly by American companies. However, this led to overproduction and when a global potash glut began in the late 1960s the industry almost collapsed. The Liberal government of the province introduced an emergency plan setting up quotas and a price floor
in 1969. This plan was popular among the companies, which could now charge monopoly prices. The NDP government that was elected in 1971 in Saskatchewan was dissatisfied with this plan as the huge profits went to the companies rather than the government, and it wasn't sustainable in the long term. In 1974 the government passed a new potash regulation scheme, that included a reserve tax. This plan was resisted by the potash producers, and its constitutionality was challenged. Thus in 1975 the provincial government established the Potash Corporation of Saskatchewan as a government crown corporation.
In November 1975 the province announced its intention to take part of the potash industry into public ownership. The government offered to negotiate with the producers, and many of them agreed to sell to the government. Over the next several years PCS bought mines around Saskatchewan, and eventually came to control 40% of domestic production. Public ownership drew the ire of the United States government, which criticised the provincial government for buying Americans' assets and creating a monopoly. In the 1980s the Commerce Department accused the corporation of dumping
and imposed massive duties on all potash imports to the United States.
In the early 1980s the company struggled and lost money for several years accumulating an $800 million debt. In 1989 the Conservative government decided to privatize it by selling the company to private investors. During the 1990s PotashCorp expanded by buying up a number of American potash companies including Potash Company of America, Florida Favorite Fertilizer, Texasgulf, and Arcadian Corporation. Today it owns assets across Canada, the United States, and also in Brazil and the Middle East. By March 2008, due to rising potash prices it had become one of the most valuable companies in Canada by market capitalization
, valued at almost C$63 billion.
In August 2010, PotashCorp became the subject of a hostile takeover bid by Anglo-Australian mining giant BHP Billiton
. On November 3, 2010, The Government of Canada announced that it was blocking the BHP bid as it did not feel the purchase would yield a "net benefit" for Canada; BHP withdrew its bid soon thereafter.
via the Moroccan Government. According to the United Nations
, Western Sahara is a territory illegally occupied by Morocco. PotashCorp, among other companies, has been criticized for helping fund this occupation by buying Western Saharan resources from Morocco.
A coalition of conservation organizations are challenging a permit issued by the North Carolina Division of Water Quality to PotashCorp's Aurora, North Carolina phosphate mining operation, which allows the company to expand its mining operation. The mining expansion will have a significant impact on high quality wetlands and aquatic habitat. The permit presumes the state will write new rules that accommodate the company’s ambitions.
A group of community members in Penobsquis
in New Brunswick
, where PotashCorp has existing and planned potash mines, has launched an action against the mine for damages relating to lost wells, subsidence, noise, light and dust pollution as well as anxiety. This action is being handled through the New Brunswick Mining Commissioner.
In 2011, a planned Sulfur Melting Plant facility in Morehead City, North Carolina
was withdrawn after public opposition.
Saskatoon
Saskatoon is a city in central Saskatchewan, Canada, on the South Saskatchewan River. Residents of the city of Saskatoon are called Saskatonians. The city is surrounded by the Rural Municipality of Corman Park No. 344....
, Saskatchewan
Saskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
. The company is the world's largest potash
Potash
Potash is the common name for various mined and manufactured salts that contain potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains, and this was the major historical source for it before the industrial era...
producer and the third largest producers of nitrogen and phosphate, three primary crop nutrients used to produce fertilizer. At the end of 2010, the company controlled 20% of the world's potash production capacity, 2% of nitrogen production capacity and 5% of phosphate supply. The company is part-owner of Canpotex
Canpotex
Canpotex, short for Canadian Potash Exporters , is a Canadian potash exporting and marketing firm, incorporated in 1970 and operating since 1972. Based in Saskatchewan, Canpotex manages the entire Saskatchewan potash exporting industry , including transportation and delivery...
, which manages all potash exporting from Saskatchewan
Saskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
.
It is by far the world's largest producer of potash, producing 20% of the world's supply. It is also the world's largest fertilizer
Fertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
producer, the third largest phosphate
Phosphate
A phosphate, an inorganic chemical, is a salt of phosphoric acid. In organic chemistry, a phosphate, or organophosphate, is an ester of phosphoric acid. Organic phosphates are important in biochemistry and biogeochemistry or ecology. Inorganic phosphates are mined to obtain phosphorus for use in...
producer and the third largest nitrogen
Nitrogen
Nitrogen is a chemical element that has the symbol N, atomic number of 7 and atomic mass 14.00674 u. Elemental nitrogen is a colorless, odorless, tasteless, and mostly inert diatomic gas at standard conditions, constituting 78.08% by volume of Earth's atmosphere...
producer.
History
The company was created by the government of Saskatchewan in 1975. In 1989 it became a publicly traded company as the government of Saskatchewan sold off some of its shares, selling the remaining shares in 1990.The Saskatchewan potash industry began in the 1950s and 1960s. The government saw it as a promising new field and granted large subsidies to the new projects, mainly by American companies. However, this led to overproduction and when a global potash glut began in the late 1960s the industry almost collapsed. The Liberal government of the province introduced an emergency plan setting up quotas and a price floor
Price floor
A price floor is a government- or group-imposed limit on how low a price can be charged for a product. For a price floor to be effective, it must be greater than the equilibrium price.-Effectiveness of price floors:...
in 1969. This plan was popular among the companies, which could now charge monopoly prices. The NDP government that was elected in 1971 in Saskatchewan was dissatisfied with this plan as the huge profits went to the companies rather than the government, and it wasn't sustainable in the long term. In 1974 the government passed a new potash regulation scheme, that included a reserve tax. This plan was resisted by the potash producers, and its constitutionality was challenged. Thus in 1975 the provincial government established the Potash Corporation of Saskatchewan as a government crown corporation.
In November 1975 the province announced its intention to take part of the potash industry into public ownership. The government offered to negotiate with the producers, and many of them agreed to sell to the government. Over the next several years PCS bought mines around Saskatchewan, and eventually came to control 40% of domestic production. Public ownership drew the ire of the United States government, which criticised the provincial government for buying Americans' assets and creating a monopoly. In the 1980s the Commerce Department accused the corporation of dumping
Dumping (pricing policy)
In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market...
and imposed massive duties on all potash imports to the United States.
In the early 1980s the company struggled and lost money for several years accumulating an $800 million debt. In 1989 the Conservative government decided to privatize it by selling the company to private investors. During the 1990s PotashCorp expanded by buying up a number of American potash companies including Potash Company of America, Florida Favorite Fertilizer, Texasgulf, and Arcadian Corporation. Today it owns assets across Canada, the United States, and also in Brazil and the Middle East. By March 2008, due to rising potash prices it had become one of the most valuable companies in Canada by market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
, valued at almost C$63 billion.
In August 2010, PotashCorp became the subject of a hostile takeover bid by Anglo-Australian mining giant BHP Billiton
BHP Billiton
BHP Billiton is a global mining, oil and gas company headquartered in Melbourne, Australia and with a major management office in London, United Kingdom...
. On November 3, 2010, The Government of Canada announced that it was blocking the BHP bid as it did not feel the purchase would yield a "net benefit" for Canada; BHP withdrew its bid soon thereafter.
Criticism
PotashCorp currently imports phosphate rock from Western SaharaWestern Sahara
Western Sahara is a disputed territory in North Africa, bordered by Morocco to the north, Algeria to the northeast, Mauritania to the east and south, and the Atlantic Ocean to the west. Its surface area amounts to . It is one of the most sparsely populated territories in the world, mainly...
via the Moroccan Government. According to the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
, Western Sahara is a territory illegally occupied by Morocco. PotashCorp, among other companies, has been criticized for helping fund this occupation by buying Western Saharan resources from Morocco.
A coalition of conservation organizations are challenging a permit issued by the North Carolina Division of Water Quality to PotashCorp's Aurora, North Carolina phosphate mining operation, which allows the company to expand its mining operation. The mining expansion will have a significant impact on high quality wetlands and aquatic habitat. The permit presumes the state will write new rules that accommodate the company’s ambitions.
A group of community members in Penobsquis
Penobsquis, New Brunswick
Penobsquis is a Canadian village in New Brunswick.It is located east of Sussex in the Kennebecasis River valley. The area has many dairy farms....
in New Brunswick
New Brunswick
New Brunswick is one of Canada's three Maritime provinces and is the only province in the federation that is constitutionally bilingual . The provincial capital is Fredericton and Saint John is the most populous city. Greater Moncton is the largest Census Metropolitan Area...
, where PotashCorp has existing and planned potash mines, has launched an action against the mine for damages relating to lost wells, subsidence, noise, light and dust pollution as well as anxiety. This action is being handled through the New Brunswick Mining Commissioner.
In 2011, a planned Sulfur Melting Plant facility in Morehead City, North Carolina
Morehead City, North Carolina
Morehead City is a port city in Carteret County, North Carolina, United States. The population was 8,661 at the 2010 census. Morehead City celebrated the 150th anniversary of its founding on May 5, 2007...
was withdrawn after public opposition.