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Discussion Starter #1
live this am from the whitecap dakota first nation, saskatchewan.

http://www.montrealgazette.com/business/First+Nations+Potash+Corp/3739130/story.html

other media are downplaying this story or suppressing it altogether.

the sask first nations are fronting for unnamed chinese investors, pension funds & merchant banks in a rival bid for potash.

recently i posted in another thread how the chinese have for years, quietly & diplomatically, gone about forging powerful, durable relationships with many first nations in canada's north. Meanwhile buying up our northern mines & resource properties.

ottawa should quit wasting its time snivellilng about US submarines & interests in our arctic waters. Some day canada is going to wake up & discover that everything north of 60 is owned by china.
 

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I wouldn't be too concerned. You can move mineral deposits, so if they do anything untoward, we can legislate their behaviour or nationalize the assets. China would have little it could do about it short of triggering nuclear war.
 

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I think it is more about being able to control the pricing and supply of these resources.
They can't physically "steal" the materials, but they can control & manipulate the pricing/supply.
 

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the story isn't being totally downplayed by the media ...

http://www.cbc.ca/money/story/2010/10/28/potash-bid-earnings.html

foreign interests already own most of Potash:
http://www.timescolonist.com/doesn+matter+owns+Potash+Corp/3732677/story.html

"Potash Corp. is currently more than 50 per cent owned by interests outside Canada. Approximately 90 per cent of the shares are owned by institutions such as Capital World Investors of Los Angeles, Blackrock Inc. of New York and American mutual funds."

Interesting stuff here as well:
http://www.nfu.ca/press_releases/2010/potash_history.pdf
 

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Humble pie is right I would be concerned. The Chinese are very smart to forge powerful relationships with first nations. First nations are like a nuclear threat to the government because the government is to afraid to do anything when it comes to first nations. This is not a knock on first nations, they have found a way to do anything they want in Canada and have it paid for.
 

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I think it is more about being able to control the pricing and supply of these resources.
They can't physically "steal" the materials, but they can control & manipulate the pricing/supply.
If we feel they're being anti-competitive, we can fine the hell out of them until they change their practices. If they choose not to, the fines can become confiscatory.
 

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Discussion Starter #7
one occasionally hears advice to play the ostrich in strategic planning sessions. Oh, Let Them Cause Some Damage First And After That We Will Try To Do Something About It. The most famous example of this was british pm neville chamberlain when he appeased hitler in 1939, although churchill saw what was going to happen.

but effective planning doesn't follow these lines. Damage often exceeds anything that can be mitigated or claimed against, sometimes many years in the future, so good planning should anticipate & seek to control unfortunate events.

with respect to mining companies, for example, remediation of mine sites is an issue that no country has even begun to be able to solve. Toxic tailings ponds & leaking old mines abound all over the planet, even in canada. The farther away the nationality of the mine owner, the harder it will ever be for our children to go after them & hold them accountable.

another serious problem with foreign ownership is the erosion of all the top-level jobs for canadians as these get taken over by the new offshore head office. Not just in the primary industry itself that has been bought, but also in related fields such as university research, lawyering, marketing, advertising.

couple days ago in another thread i quoted eric reguly, the globe's veteran business correspondent who opposes the sale of potash to foreign investors, citing the demise of the city of hamilton once US Steel shut down Stelco. No one read the post, so perhaps i could be forgiven for running reguly's insights one more time.

" History says subsidiaries rarely thrive," writes reguly.

" Subsidiaries spend their whole time arguing for capital. The senior executives in the subsidiary typically report to middle management in the head office. Subsidiaries exist to execute strategy, not devise it. They don’t generally get involved in non-investment activities, ranging from investor relations to intellectual rights protection. All that is done at the head office.

" As a result, the subsidiary becomes a branch plant, devoid of the best careers and all the indirect jobs that go with them, at law firms, advertising and consulting agencies, right down to limo drivers and chefs. The city itself suffers, and if you don’t believe that, look at what has happened to Canada’s once thriving steel town, Hamilton, where Stelco (owned by U.S. Steel) is shut down. "


i think it's sneaky of the chinese to snuffle up some capital investment and a lot of big-time public relations from the first nations in order to camouflage their bid for potash. There may be US investment bankers already owning potash, as riff raff says, but my guess is that they take a strictly passive role & have nothing to do with the culture of the company.
 

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As much as I like free markets, I think that we should disallow any Chinese (or whoever else) takeover of Canadian resource companies as long as Canadian companies are prevented from purchasing Chinese resource companies. It is hard to see how foreign companies owning Canadian resources is of net benefit to us.
 

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look at how canadian mining companies have been behaving throughout the world ... they essentially have been doing whatever the hell they want, local population be damned, they extract whatever they want for their own benefit, using payoffs, bribery, murder and damaging the environment in whatever way they please ...

i guess it starts to hurt when it happens to you ...

whatever happened to the "free market" ?

i guess if you really prick a "capitalist" he'll bleed a little socialism ....

:)
 

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Discussion Starter #10
re "canadian mining companies [conduct] throughout the world" ... that's an issue i'm involved in, but it's really a separate issue (btw had you heard that bill C-300 failed last night in the Commons by only 6 votes, with many key liberals & even some new democrats abstaining from this smoking gun.)

the issue in this thread is foreign ownership of potash and other giant canadian resource companies. I'd just like to mention that often our biggest miners fail to thrive when they are sold to foreigners. Falconbridge was one of the first to go out many years ago. But she came back to noranda, dragging her tail behind her. Often it's the culture clash between the canadian miners & the foreign managers. For the time being, falconbridge is out again, belonging in this round to xstrata of switzerland.

right now Vale of brazil (RIO) is having problems with its takeover of inco. Sudbury is not happy with the brazilian. I haven't heard how newfoundland is faring under the latin thumb - it's the big voisey's bay operation and its smelters - but the newfies are not known for putting up with ess aitch. Occasionally one hears a vague reference to the fact that inco, also, may eventually return to canada, dragging its tail behind it.
 

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look at how canadian mining companies have been behaving throughout the world ... they essentially have been doing whatever the hell they want, local population be damned, they extract whatever they want for their own benefit, using payoffs, bribery, murder and damaging the environment in whatever way they please ...

i guess it starts to hurt when it happens to you ...

whatever happened to the "free market" ?

i guess if you really prick a "capitalist" he'll bleed a little socialism ....

:)
First of all, I don't see why we should allow Canadian or non-Canadian companies to behave abominably here just because some Canadian companies allegedly indulge in unsavory practices abroad. In any case, I don't think the worry is Chinese-controlled companies will not obey Canadian laws and regulations.

But the worry is that Chinese companies want to take over Canadian resources while not affording Canadian companies to do the same in China. Free trade should be a two way street.
 

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How likely would it be that a Canadian company could get control of a very important rare earth interest or company in China.
 

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Discussion Starter #13
CC there are some canadian miners operating in china. Midcap eldorado gold is perhaps the best known, but there are several small silver miners as well.

imo there is a schizoid split between what all miners claim they do in their home countries & how they actually behave when they get outside the national boundaries, where they conduct themselves like 16th spanish conquistadores & basically try to make off with the valuable ores like pirates. Same goes for oil, lumber, bananas, at least in latin America. No wonder after 400 years of this the left-wing priests in latin America all quit Rome & became communists in the liberation theology movement (which is coming back into fashion, despite strict opposition from the vatican.)

the worry is that all giant resource projects have giant engineering ramifications & complications, and foreigners including canadians can too easily sneak away leaving the mess behind them. Third world countries are especially vulnerable.

here's a famous recent example. The san jose mine in chile where the celebrated 33 were buried for months in the refuge of a badly-maintained mine & only rescued couple weeks ago by a miracle.

i don't know whose is the capital that owned that mine. Would appreciate hearing if anyone knows. Standards like those - collapsed escape shaft, for example, which the miners had been complaining about for months - characterize mines in china & south africa. Whoever the company turns out to be, they are worse than toast now, because the combined claims against them will be many times more than they & any insurance they may have can ever muster. Chile will want to go after them for as much of the rescue costs as it can get, i am sure.

so the episode will leave a great big fat deficit for chile & no doubt also for the US & canadian drillers who flew so gallantly to the rescue. There will be no organism that can ever reimburse any of these rescuers.

if it were a chilean miner, they wouldn't have any funds to pay for the rescue operation, but at least local sentiment would make it impossible for them to operate or obtain any more permits, ever again, in chile. A foreign owner, on the other hand, will be scot-free to go, with no retribution and not even any shame.

all this is by way of saying canada should be unbelievably careful who owns her strategic resources.

ps to dogcom: zero likelihood. China is not even exporting the rare minerals let alone offering ownership to foreigners. It's often said that the vogue for rare earths usually characterizes a peak in mining stocks & we seem to be seeing that now ... i myself do subscribe to this view although not fanatically, regarding it as only another straw in the wind.
 

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First of all, I don't see why we should allow Canadian or non-Canadian companies to behave abominably here just because some Canadian companies allegedly indulge in unsavory practices abroad. In any case, I don't think the worry is Chinese-controlled companies will not obey Canadian laws and regulations.

But the worry is that Chinese companies want to take over Canadian resources while not affording Canadian companies to do the same in China. Free trade should be a two way street.
cc, there is nothing "alleged" about it, the history of the west (inlcuding canada) in the exploitation of resources (especially mining and minerals) in the rest of the world (especially africa and south america) is a matter of the historical record

i just find it funny to see how huffed up we are getting about china running around the world using whatever dirty tactics they can to exploit resources wherever they can .... exactly like we in the west did to them and others for the last 150 years

i just can't stand the hypocrisy and the complete blindness to how we have behaved ...

not surprisingly, like many in the "third" world, they have long memories, they haven't forgotten how they were treated by the colonial west and so will be very, very tough to negotiate with

and we are at a disadvantage because our higher standard of living and constant need for new markets and return, forces us to make deals that aren't in our long term national interest

you have to love the asymmetry of it all ...

having said all that, i don't disagree with you at all ... it should be a 2 way street ... and we would be fools to allow them to get away with it if they don't open markets to us ... but i suspect we will allow them to get away with it .. the hungry beast that is capitalism must be fed

ps. why don't we just nationalize the company ? let's have the canadian government buy it ... or would that be too "socialist" ?
 

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Globalism is just something we're going to have to get used to , but communist countries will always have the advantage over democracies , they have complete control of their side.

No opposition.
 

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BHP offer refused and already there are rumours a couple of Chinese consortiums and a Russian business group are putting together some offers.

It doesn't look like they believe the door is completely shut, just yet
 

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I'm surprised that there are still companies willing to make a bid for POT. It's caused me to make less money on my PUT contract!

And regarding the other topic, Western countries have in the past and continue to pillage from 3rd world countries. Any time I hear about a rich South African, I'm pretty sure they made some money on diamonds or other resources.

Of course there are plenty of Westerners going to other countries for high paying management jobs just because there is a stereotype that they are more competent/capable as well. That in my opinion is another way of getting rich off someone else.

As another example of pillaging, I'm going to Egypt this month and I would not be surprised if there are more artifacts in the London museums than they have left in Cairo.
 
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