Potash Mining Controversies


"Potash mining is abuzz with environmental, political and financial controversy."

Resource Investing News, Leia Toovey

Like most mining endeavors, potash mining is abuzz with controversy ranging from environmental, political and financial. Over the course of the past year, there have been concrete examples of some controversies that have rocked the potash mining business.

Canada blocks BHP Billitonís bid for Potash Corp.
In November 2010, the Canadian government blocked BHP Billiton's (NYSE:BHP) $39B bid for Potash Corp of Saskatchewan (NYSE:POT), saying the deal would not be of "net benefit" to the nation. The blocking of the bid fed into the growing international controversy of resource nationalism.

Potash Cartels?
Accusations of price-fixing and collusion are not new to the potash market; they have fueled the rumor mill for years. However, this year they received more attention, on the back of BHP's bid. Canpotex was controlled a large share (about one-third) of the global potash market and got a lot of flak during the recession, due to the fact that potash prices were not lowered even as the recession spread.

Environmental Concerns
There are environmental concerns involved in any mining activity and while the potash industry did not suffer directly any public fall-out this year, indirectly it did through a controversial phosphate mine in Florida. Last July, The U.S. District Court in Jacksonville, Florida, granted an injunction preventing Mosaic from expanding its phosphate-rock mine into neighboring wetlands.

Controversy in the potash sector is not always from the outside in, occasionally potash miners may get into a legal battle with each other. Potash is already put under the microscope as it is a crucial component in increasing global food supply.

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