OTTAWA: A foreign takeover of the PotashCorp of Saskatchewan (PCS) would threaten potash mineworkers and their communities across the country, says the president of the union representing about 3,000 potash workers, including 800 miners, production and construction workers at PCS.
Recently, Australian miner BHP Billiton offered US$38.6 billion to purchase PotashCorp, striking up controversy over the takeover. The Saskatchewan potash firm says the company is potentially worth tens of billions more than what BHP is offering and there are other suitors already in talks with the fertilizer giant.
But it’s not who’s the highest bidder that’s causing fear among industry unions. It’s the possibility that if a multinational giant takes over the corporation, rules for civilized negotiations to keep jobs and investment in Canada will be off the table.
“Right now the Communications, Energy and Paperworkers union of Canada (CEP) and PCS have agreements in place that promote local hiring and put the people of Saskatchewan first. But, speaking from experience, it’s very difficult to extract that commitment from a company headquartered in a different hemisphere,” Dave Coles, president of CEP.
Coles says there is also growing concern that a foreign owner would destroy the work of Canpotex, which markets and exports Canadian potash for the benefit of Canada. “It’s a slippery slope toward a monopoly, says Coles, and all Canadian potash mining companies would be vulnerable.”
PotashCorp has been in contact with a number of third parties that want to explore alternative transactions to the US$130 per share proposal by BHP.
According to the Canadian Press, if PotashCorp were to sell at a price that’s near its record stock highs, it could be worth about US$71 billion. Earlier this week, the companies stock traded higher and reached levels not seen since September 2008.
If the takeover takes place, Coles says, “Our manufacturing base is taking another hit. And once again it begs the question: ‘who is in control of Canadian resources'”?
Given its track record, Coles holds out little hope that the Harper government will step in to stop any takeover. He notes that the Investment Canada Act outlaws foreign takeovers that do not deliver a “net benefit” to Canada. Since the Act came into force in 1985, only one takeover has been rejected, while 13,500 have gone ahead.
Observers have noted that there are a limited number of potential buyers big enough to make a deal, but have pointed to Brazil’s Vale SA and Anglo-Australian Rio Tinto PLC as mining giants with deep enough pockets to compete in the bidding.