Guardian (UK): BHP Billiton urged to pull Potash Corp out of Western Sahara
- BHP Billiton urged to pull Potash Corp out of Western Sahara
Activist group wants BHP to halt the export of phosphates from disputed region if it takes control of Potash Corp
By Graeme Wearden
Sunday 22 August 2010
BHP Billiton is being urged to help end the export of valuable resources from Moroccan-occupied Western Sahara if it succeeds in its attempt to buy Canada's Potash Corporation.
Western Sahara Resource Watch (WSRW), an activist group, is writing to Marius Kloppers, the mining company's chief executive, to ask him to halt the export of phosphates from the region by Potash Corp in the event of BHP Billiton taking control. It accuses Potash Corp, the world's biggest fertiliser company, of propping up the Moroccan regime that has occupied much of the Sahara for the past 35 years.
Sara Eyckmans, WSRW's international co-ordinator, said: "We have asked BHP for an urgent meeting to discuss the way that Potash has been exporting phosphates from the Sahara for decades.
"We hope and expect that any purchaser will tackle this issue."
WSRW's intervention brings a political and humanitarian angle to a $39bn (£25bn) takeover battle that began last Wednesday, and which will continue this week as BHP launches a charm offensive to persuade its shareholders to support the bid.
Morocco occupied Western Sahara, home to the Sahrawi tribes, in 1975. Several other fertiliser companies also export phosphates from Western Sahara through deals with the Moroccan government.
Potash Corp is the biggest exporter, according to WSRW. It has been lobbying the company to change its ways for many years, and BHP's hostile takeover bid has raised hopes of a breakthrough.
In the 1980s, Broken Hill Proprietary Company pulled out of the Sahara after pressure from campaigners. It merged with an Anglo-Dutch miner in 2001 to form the mining giant BHP Billiton.
"We do hope that BHP will take the same responsible position now, if they are successful in taking over Potash," Eyckmans said.
WSRW estimates that Potash has spent up to $500m on phosphates from the Sahara in the past two decades. It typically exports between 400,000 to 500,000 tonnes of phosphates a year from the region. For much of that time, a tonne of phosphates cost about $50, although the price rose sharply to about $200 two years ago.
The Western Sahara dispute can be traced back to the 1960s, when Spain began withdrawing from colonial territories in Africa. The indigenous Sahrawi tribes laid claim to Spanish Sahara, as it was known but, in 1975, tens of thousands of Moroccans crossed into the region in a mass protest called the Green March.
Hundreds of thousands of Sahrawi refugees fled to Algeria, and they have languished in camps ever since, according to campaigners. Attempts to organise a referendum that could lead to self-determination for the Sahrawi people have repeatedly failed, with Morocco favouring autonomy within the Moroccan state.
Eyckmans argues that Potash Corp's activities in Western Sahara are giving legitimacy to Morocco's territorial claim and denying economic opportunities to the Sahrawi people.
A BHP spokesman declined to comment on Potash Corp's activities in the Sahara.
On Wednesday, BHP will report its full-year financial results. They are expected to show a sharp rise in profits on the back of higher commodity costs as the global economy emerged from recession.
The results will be accompanied by the usual "roadshow" to attract investment, but on this occasion BHP is likely to focus on persuading its own shareholders that buying Potash Corp makes sense. The company is keen to avoid the kind of revolt that undermined Prudential's bid for the Asian insurer AIA this year, although it does not need to put the Potash Corp offer to a shareholder vote.
Potash Corp rejected BHP's offer last week and the company is thought to be seeking a "white knight" ally to thwart the advances of Kloppers and his team. Sinochem, the Chinese state-owned chemical group, is seen as a frontrunner.
Potassium carbonate, or potash, is a key ingredient in fertilisers. Analysts predict a surge in demand from developing countries such as China and India as the world population continues to increase. Many regions face a growing risk of famine unless their arable land becomes more productive.
BHP's hostile bid is facing opposition in Canada, where Potash Corp is based and where it employs workers at several mines in the province of Saskatchewan. Unions representing these employees have asked the Canadian government to hold hearings to prove whether or not the deal would benefit Canada.
"On the basis of the union's review of BHP's offer ... the takeover has not demonstrated a clear net benefit to Canada," Ken Neumann, United Steelworkers' national director for Canada, said.
Potash is Canada's sixth-largest company, and there is also concern that the country's natural resources industry is increasingly moving into foreign hands. Toronto's Falconbridge was acquired by Xstrata in 2006, while Montreal-based aluminium producer Alcan was bought by Rio Tinto in 2007.
Norwegian Support Committee for Western Sahara
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