BHP Defends Plan to Break up Potash Cartel
BHP Billiton will stick to plans to dismantle the Canpotex potash cartel if its hostile takeover of Potash succeeds, Chief Executive Marius Kloppers told the Globe and Mail newspaper on Tuesday.
He said that his company's plans to dismantle the cartel -which has buoyed prices for years - would eventually help Saskatchewan's lower-cost potash producers, and that would benefit the province as a whole.
Saskatchewan Premier Brad Wall on Monday repeated his concerns that a BHP takeover of Potash would hurt his province because a breakup of Canpotex would cut government revenue derived from potash sales.
Potash is one of three members of the cartel, which together account for a third of global potash exports.
Kloppers said a break-up would be a natural next step toward market-based pricing for potash, a key fertilizer ingredient. "Our experience is, it's better to move with the time rather than to try and hold it back," he told the Globe and Mail editorial board.
Potash has already rejected BHP's $39 billion bid as being too low, and media reports have suggested that rival bids from China could materialize.
Kloppers said BHP is currently focused on clearing regulatory hurdles in both Canada and the U.S.
