The
Potash Corporation of Saskatchewan Inc. , today generally referred to as
PotashCorp, is a Canadian corporation based in
SaskatoonSaskatoon is a city located in central Saskatchewan, Canada, on the South Saskatchewan River. Residents of the city of Saskatoon are called Saskatonians....
,
SaskatchewanSaskatchewan is a prairie province in Canada, which has an area of and a population of 1,023,810 , mostly living in the southern half of the province. Of these, 233,923 live in the province's largest city, Saskatoon, while 194,971 live in the provincial capital, Regina...
. The company is the world's largest
potashPotash is the common name given to potassium carbonate and various mined and manufactured salts that contain the element potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains....
producer and the second and third largest producer of nitrogen and phosphate, three primary crop nutrients used to produce fertilizer. 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.
The company was created by the government of Saskatchewan in 1975.
The
Potash Corporation of Saskatchewan Inc. , today generally referred to as
PotashCorp, is a Canadian corporation based in
SaskatoonSaskatoon is a city located in central Saskatchewan, Canada, on the South Saskatchewan River. Residents of the city of Saskatoon are called Saskatonians....
,
SaskatchewanSaskatchewan is a prairie province in Canada, which has an area of and a population of 1,023,810 , mostly living in the southern half of the province. Of these, 233,923 live in the province's largest city, Saskatoon, while 194,971 live in the provincial capital, Regina...
. The company is the world's largest
potashPotash is the common name given to potassium carbonate and various mined and manufactured salts that contain the element potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains....
producer and the second and third largest producer of nitrogen and phosphate, three primary crop nutrients used to produce fertilizer. 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.
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
fertilizerFertilizers are chemical compounds applied to promote plant and fruit growth. Fertilizers are usually applied either through the soil or by foliar feeding...
producer. It is the third largest
phosphateA phosphate, an inorganic chemical, is a salt of phosphoric acid. In organic chemistry, a phosphate, or organophosphate, is an ester of phosphoric acid. Organic phosphates are important in biochemistry and biogeochemistry or ecology. Inorganic phosphates are mined to obtain phosphorus for use in...
producer and fourth largest
nitrogenNitrogen is a chemical element that has the symbol N and atomic number 7 and atomic mass 14.00674 u. Elemental nitrogen is a colorless, odorless, tasteless and mostly inert diatomic gas at standard conditions, constituting 78% by volume of Earth's atmosphere.Many industrially important...
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 floorA price floor is a government- or group-imposed limit on how low a price can be charged for a product. In order for a price floor to be effective, it must be greater than the equilibrium price.-Effectiveness of price floors:...
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 StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
government, which criticised the provincial government for buying Americans' assets and creating a monopoly. In the 1980s the Commerce Department accused the corporation of
dumpingIn economics, "dumping" can refer to any kind of predatory pricing. However, the word is now generally used only in the context of international trade law, where dumping is defined as the act of a manufacturer in one country exporting a product to another country at a price which is either below...
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 capitalizationMarket capitalization/capitalisation is a measurement of the size of a business enterprise equal to the share price times the number of shares outstanding of a public company...
, 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 BrunswickPenobsquis is a Canadian village in New Brunswick.It is located east of Sussex in the Kennebecasis River valley.The village is the site of a large potash deposit which is mined by the New Brunswick division of the Potash Corporation of Saskatchewan; PCS announced expansion plans in 2007 which...
mine. Despite pleas from local residents a water system is being supplied by the Province of
New BrunswickNew Brunswick is one of Canada's three Maritime provinces and is the only constitutionally bilingual province in the confederation. The provincial capital is Fredericton...
with only 10% of the costs being covered by PotashCorp.
PotashCorp has also raised the ire of people in the
Sussex, New BrunswickSussex is a Canadian town in Kings County, New Brunswick.Sussex straddles the Kennebecasis River, 70 km northeast of Saint John, is a major dairy products producer in the province, and is home to Atlantic Canada's largest hot air balloon festival.-History:In 1857 the European and North American...
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 FundyThe Bay of Fundy is a bay on the Atlantic coast of North America, on the northeast end of the Gulf of Maine between the Canadian provinces of New Brunswick and Nova Scotia, with a small portion touching the U.S. state of Maine...
. The proposed route is adjacent to the aquifer, and well protection fields for the Town of Sussex, and the Village of Sussex Corner.
PotashCorp currently imports phosphate rock from
Western SaharaWestern Sahara is a territory of North Africa, bordered by Morocco to the north, Algeria to the northeast, Mauritania to the east and south, and the Atlantic Ocean to the west. Its surface area amounts to . It is one of the most sparsely populated territories in the world, mainly consisting of...
via the Moroccan Government. According to the
United NationsThe United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and the achieving of world peace...
, 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.
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.
External links