New York | Reuters –– U.S. fertilizer producer Mosaic Co. would lose potash sales if Saskatchewan raises taxes on miners, and customers choose competitors from other countries, its CEO said on Wednesday.
“If they were to tax more, we would suffer from that, we would sell less, our profits would be less and they will kill the goose that lays the golden egg,” Jim Prokopanko said on the sidelines of a BMO investor conference in New York.
Mosaic is North America’s second-largest potash producer, with most of its mining capacity in Saskatchewan. Potash prices fell sharply in 2013 and, while they have recovered somewhat, remain at relatively low levels amid excess global capacity.
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The company would then have to look at cutting jobs or investment, moves that would end up hurting Saskatchewan’s revenues, he said. The province already charges the highest royalties on potash among producing regions, which include Russia, Belarus and Israel.
Prokopanko, who will be replaced by Joc O’Rourke as CEO in August but will stay on as an adviser until January, said he has also told Saskatchewan Premier Brad Wall not to offer incentives for new production. New mines could lead to others shutting down, he said.
The provincial government said in March it would launch a review to change the taxes it charges on production of potash to better reflect output and lessen the influence of potash prices on annual provincial revenue.
The review has not started and is expected to last up to 18 months.
Mosaic has been working to reduce costs and last year said it would eliminate more than 500 jobs, as well as shut production of muriate of potash in New Mexico.
“I’m advising the government that they have to try and help with that and that doesn’t mean adding extra cost,” Prokopanko said.
— Rod Nickel is a Reuters correspondent based in Winnipeg covering the agriculture and mining sectors.
