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Potash Corporation of Saskatchewan
Type Public (TSXPOT, NYSEPOT)
Founded 1975
Headquarters Canada Saskatoon, SK, Canada
Key people William Doyle (CEO)
Industry Materials
Products Potash
Revenue US$9.45 Billion (FY 2008)[1]
Operating income US$4.19 Billion (FY 2008)[1]
Net income US$3.50 Billion (FY 2008)[1]
Employees 4,879 (2008)[2]
Website http://www.potashcorp.com/

The Potash Corporation of Saskatchewan Inc. (TSXPOT, NYSEPOT), today generally referred to as PotashCorp, is a Canadian corporation based in Saskatoon, Saskatchewan. The company is the world's largest potash producer and the second and third largest producer of nitrogen and phosphate, three primary crop nutrients used to produce fertilizer.[3] At the end of 2007, the company controlled 22% of the world's potash production capacity, 2% of nitrogen production capacity and 6% of phosphate supply.[4]

Contents

History

The company was created by the government of Saskatchewan in 1975. In 1989 it became a publicly traded company and the government of Saskatchewan sold off some it shares with the remaining shares sold off in 1990. [5]

It is by far the world's largest producer of potash, producing 23% of the world's supply. It also controls almost all of the world's unused supply, and has long deliberately held back production to keep potash prices high. It is also the world's largest fertilizer producer. It is the third largest phosphate producer and fourth 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.

Criticism

PotashCorp has been blamed for the loss of well water for over 50 homes due to water inflow at their Penobsquis, New Brunswick mine. Despite pleas from local residents a water system is being supplied by the Province of New Brunswick with only 10% of the costs being covered by PotashCorp.[6]

PotashCorp has also raised the ire of people in the Sussex, New Brunswick area over a proposed new brine line that will transport the water from this flooding mine, and water from a new mine out to the Bay of Fundy. The proposed route is adjacent to the aquifer, and well protection fields for the Town of Sussex, and the Village of Sussex Corner.[7]

PotashCorp currently imports phosphate rock from Western Sahara 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.[8]

PotashCorp's Aurora NC phosphate mining operation is currently at the center of a controversy regarding a permit application to expand its mine. The permit application request currently under review is for 37 years of mining and over 3 times the amount of impact to high quality wetlands and aquatic habitat. A coalition of conservation organizations are challenging a permit issued by the N.C. Division of Water Quality that legally approves the largest destruction of wetlands in the state’s history by PCS Phosphate. The permit presumes the state will write new rules that accommodate the company’s ambitions.

References

External links

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