* Saskatchewan ministers in Ottawa to lobby officials
* Province looks at whether it can tax BHP potash reserves
* Flags past BHP comments calling Canada "branch office"
* BHP says it would move top potash jobs back to Canada
* Potash Corp shares rise 1 pct in New York to $143.70
(Adds BHP comments)
By Rod Nickel
WINNIPEG, Manitoba, Oct 25 Saskatchewan's
opposition to BHP's (BHP.AX) bid for Potash Corp (POT.TO) is
based on the conviction that a takeover would hurt the Canadian
province, its top elected official said on Monday, not on the
hope of squeezing concessions out of BHP.
The home province of the world's largest fertilizer
supplier is recommending that the federal government block a
$39 billion bid by BHP Billiton, the Anglo-Australian mining
giant. It says a takeover would provide no net benefit to the
country and will cost Saskatchewan revenue, jobs and strategic
influence over a key commodity.
Potash Corp mines most of its potash in Saskatchewan, where
it also has a head office.
"This isn't a bargaining position that we've come to,"
Premier Brad Wall said in an interview with Reuters. "It's our
position and that's what we're going to advocate for."
Wall dispatched two of his cabinet ministers to Ottawa on
Monday to begin lobbying politicians and government officials
to reject the deal. Ottawa is scheduled to make a decision on
whether to allow the takeover bid to go ahead by Nov. 3.
BHP spokesman Ruban Yogarajah declined to comment on
whether the company will make a new approach to Saskatchewan
before the deadline or on the government's review of the deal.
Saskatchewan's most immediate concern is the potential loss
of C$3 billion to C$6 billion ($2.9 billion to $5.9 billion)
over 10 years. That's how much the province says it could lose
in taxes and potash royalties if the takeover proceeds. The
losses would result from expected changes in how BHP would
produce and market potash, and how it could capitalize on the
province's tax laws.
BHP has offered to find ways to ensure Saskatchewan doesn't
lose revenue, but Wall has said that preventing a foreign
takeover is also of strategic importance to Canada.
The operational capacity of Saskatchewan potash mines
represent almost a third of the global total.
The premier said he has not spoken with Prime Minister
Stephen Harper since Wall made a speech last Thursday outlining
Saskatchewan's reasons for opposing the deal.
Wall did not rule out negotiating with BHP if Ottawa
approves the deal on the condition that the miner makes moves
to appease Saskatchewan.
The province is preparing a contingency plan in case Ottawa
approves the bid, including a possible tax on the potash
reserves that BHP would acquire, Wall said.
Saskatchewan is doing due diligence on whether it can
legally tax BHP differently than the province's other potash
producers, Mosaic Co (MOS.N) and Agrium Inc (AGU.TO), he said.
The premier said the province would not risk the C$6
billion worth of mine expansions planned by Mosaic and Agrium
by changing Saskatchewan's potash royalty structure.
"We're not going to mess with that," he said. "What I don't
want is royalty shock in this province, we want royalty
Wall took aim at BHP earlier on Monday, issuing a press
release that highlighted two-year-old remarks by former BHP
Chairman Don Argus that raised concerns about Australia losing
control of its resources.
"If we fail to remain competitive, Australia will incur a
substantial opportunity cost and, in the worst-case scenario,
our resources will fall into overseas hands and we will become
a branch office -- just like Canada," Argus is quoted as saying
in the July 21, 2008, issue of Hellenic Shipping News.
Saskatchewan's most strategic resource is not potash, but
its ability to attract international investors, said BHP's
"Potash Corp has drifted from its Canadian roots," he said,
repeating BHP's promise to repatriate top potash jobs to
Saskatchewan. "We will return control of the business to
Saskatoon from Chicago and our potash team will live, work, pay
taxes and raise their families in the city, not just maintain a
Shares of Potash Corp rose on Monday more than 1 percent in
Toronto and New York, while BHP's stock gained nearly 2.5
percent in London.
(Reporting by Rod Nickel; editing by Peter Galloway)