* Saskatchewan to consult miners on any changes-official
* Province not pressured by BHP takeover timeline
By Rod Nickel
WINNIPEG, Manitoba, Sept 9 Saskatchewan won't
change how it taxes potash production until well after any
takeover of Potash Corp (POT.TO) (POT.N), fearing a hasty move
could jeopardize mine expansion, a top official of the Canadian
province said on Thursday.
Saskatchewan, with its rich reserves of potash, usually
collects hundreds of millions of dollars per year in royalties
from Potash Corp, Mosaic Co (MOS.N) and Agrium Inc (AGU.TO). It
is worried that those revenues will shrink if BHP Billiton's
(BHP.AX) (BLT.L) takeover bid succeeds.
BHP, the world's biggest miner, traditionally runs
production flat-out in contrast to Saskatchewan miners'
carefully timed approach to support global prices. Under its
complex royalty formula, Saskatchewan benefits more greatly
from high prices than high production.
Changing how it calculates royalties "is not something we
take lightly," said Kent Campbell, Saskatchewan's deputy
minister of energy and resources. "It's one of government's
ultimate levers. It's something we would prefer not to have to
do, but if we see changes in market structure that ... isn't
providing a fair return, then we would look at it."
The government would do extensive consultations with potash
producers, Campbell said, and doesn't feel pressure to make
changes prior to the potential takeover.
BHP's $38.6 billion hostile takeover bid, which Potash Corp
has rejected, expires on Oct. 19.
All three big potash companies are planning major
expansions based on the current royalty structure and
Saskatchewan doesn't want to put those in jeopardy, Campbell
"We wouldn't want there to be any surprises," Campbell
Mosaic spokesman Brad DeLorey said the company concluded
talks with Saskatchewan leading to royalty changes last year,
adding, "we are pleased with the royalty structure that is in
A spokesman for Agrium declined to comment.
(Editing by Frank McGurty)