Potash Corp.: Canada blocks a foreign bid
“Bowing to political pressure to protect a rich natural resource,” Canada’s Conservative government has blocked an Australian mining company’s takeover bid for Potash Corp., said Rob Gillies in the Associated Press. BHP Billiton had offered $38.6 billion for the Saskatchewan-based company, which controls a quarter of the world’s reserves of potash, “a fertilizer ingredient critical to the world’s food supply.” Canadian Prime Minister Stephen Harper decided to oppose the deal, despite his reputation as a free-market conservative, after political leaders in Canada’s western provinces expressed opposition. Harper’s minority government needs their support to remain in power.
The failed deal might be “the turning point at which globalization went into retreat,” said Alan Beattie in the Financial Times. Harper’s government has justified its actions with a claim that securing Canadian supplies of this vital raw material “is not just a commercial convenience but a strategic imperative.” But such talk “can be used as a shield to advance rather more down-to-earth considerations.” Along with China’s unofficial embargo on rare-earth minerals, the demise of the Potash deal can be seen as “the beginning of a trend toward natural resource nationalism.”
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