PotashCorp Sues Mosaic For $1 Billion
A billion-dollar battle is underway between the world’s two largest potash producers in a conflict over mineral reserves at a Saskatchewan mine.
Potash Corp. of Saskatchewan Inc. is suing Mosaic Potash Esterhazy LP — a wholly owned subsidiary of Mosaic Co. — over the remaining amount of potash it has ownership rights to under an agreement between the companies dating to 1971.
According to an amended statement of claim approved by Saskatoon Court of Queen’s Bench Justice Neil Gabrielson on Jan. 19, Mosaic intends to end the mining agreement on Aug. 30 — a move PotashCorp says is at least two years too early and concerns more than $1 billion worth of the key fertilizer ingredient.
Mosaic, in its statement of defence, denies the allegations, saying not only that the agreement should end on Aug. 30, but that it has sent PotashCorp nearly eight million extra tonnes of potash ore worth several billion dollars — in essence loaning the world’s largest potash company the product.
Mosaic has also filed a counterclaim against PotashCorp, alleging the Saskatoon-based company failed to receive delivery of all the potash it ordered from Mosaic for the 2009 year, a breach of its obligation under the long-standing deal and leaving Mosaic with the burden and cost of storing the product.
None of the allegations in either case have been proven in court.
(Source: The Vancouver Sun)