Potash Corporation of Saskatchewan
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| Potash Corporation of Saskatchewan | |
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| Type | Public (TSX: POT, NYSE: POT) |
| Founded | 1975 |
| Headquarters | Saskatoon, SK, Canada |
| Industry | Materials |
| Products | Potash |
| Website | http://www.potashcorp.com/ |
The Potash Corporation of Saskatchewan Inc. (TSX: POT, NYSE: POT), today generally referred to as PotashCorp, is a Canadian corporation based in Saskatoon, Saskatchewan that is the world's largest producer of potash.
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[edit] 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 its shares and today no longer owns any of the firm. 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 nationalize part of the potash industry. The government offered to negotiate with the producers, and many of them agreed to sell to the government rather than be nationalized. Over the next several years PCS bought mines around Saskatchewan, and eventually came to control 40% of domestic production. The nationalization drew the ire of the United States government for buying Americans assets and for 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 a lot, and lost money for several years accumulating a $800 million debt. In 1989 the Conservative government decided to privatize it, 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.
[edit] 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.[citation needed][1]
PotashCorp has also raised the ire of people in the Sussex 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.[2]http://telegraphjournal.canadaeast.com/search/article/288807
[edit] References
- ^ telegraphjournal.com - MLA calls PotashCorp's actions slap in face to property owners
- ^ Geologist warns about threat to water source. Tammy Scott-Wallace, Saint John Telegraph-Journal, accessed April 24, 2008 [1]
