Rare Earths

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http://www.realclearscience.com/articles/2010/10/29/the_looming_rare_earths_train_wreck_106226.html

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http://www.realclearscience.com/articles/2010/10/29/the_looming_rare_earths_train_wreck_106226.html

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http://www.rareearthmarketnews.com/index.php/companies/

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http://www.rareearthmarketnews.com/index.php/companies/

[cottonpicken]

Dont know if you caught it on a previous thread but an
etf was just released on rare earths remx.

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Missed your waaaaay-down entry, cott.

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Martin in Ottawa, National Post · Monday, Nov. 1, 2010

Investment Canada has given a tentative go-ahead to BHP’s controversial takeover of Potash Corp. of Saskatchewan.

Conservative insiders say the departmental recommendation sent to the Prime Minister’s desk is a yellow light — strings are attached — to the government’s approval of the $40-billion hostile takeover of the world’s largest potash mining operation by an Australian corporation.

A source said government monitoring has been proposed to enforce the takeover terms, among them BHP’s promised relocation of executives to Saskatoon and multi-billion-dollar infrastructure investments.

Government supervision is seen as necessary to avoid the bad experiences of other multinationals that have taken over Canadian mining operations and failed to deliver on promises on job generation and investment boosts.

While the final verdict is likely still in Prime Minister Stephen Harper’s hands as he tries to thread the needle between Conservative principle and Saskatchewan politics, the compromise is seen as the only way to escape two intractable positions with high stakes at play.

Approving the takeover outright would’ve infuriated Saskatchewan Premier Brad Wall, who has campaigned vigorously against the deal as a $6-billion revenue loss to provincial coffers, and would put the Conservative’s 13 seats in their provincial fortress at risk. Three other premiers — from Alberta, Manitoba and Quebec — have supported Mr. Wall’s position.

But unilaterally rejecting the deal would’ve tarnished Canada’s global open-for-investment reputation and could’ve jeopardized proposed Canadian takeovers of mining firms Down Under.

The government’s strings on the deal, most of which have not been attached to previous Investment Canada approvals, are apparently not onerous enough to threaten the BHP offer.

It remains to be seen if the Saskatchewan government will be appeased when the details are released on Wednesday, but opposition to the current BHP bid is fierce in the province where Potash Corp. was born as a Crown corporation and now exerts global influence over supply and pricing in the potash-based fertilizer industry.

The rejection of Mr. Wall’s request for a meeting with the Prime Minister this week is seen as a sign of rapidly escalating tensions between two leaders, who were on close terms until this issue flared. While shrugged off as merely being too late to change the Investment Canada verdict, the PMO slamming the door on a friendly premier foreshadows an angry backlash in Saskatchewan to the Wednesday announcement.

Another source says the flip side of the dispute will feature prominently in the government’s damage control, specifically the "net harm” that would be caused by jeopardizing Canadian investments abroad or foreign purchases in Canada.

While a PMO spokesman insisted Monday the final decision is still pending and that Industry Minister Tony Clement’s verdict would not be overturned, the deal was again front and centre in the House of Commons.

Deputy Liberal leader Ralph Goodale, the only MP from Saskatchewan who is not a Conservative, demanded the government block the sale. The New Democrats insisted the government must go even further and pass legislation giving governments greater power to fight takeovers.

It was instructive that House Leader John Baird, the designated hitter to defend the deal, repeatedly promoted the 13 Conservative MPs from Saskatchewan as defenders of the province’s interests.

That reflects intense pressure the Prime Minister is facing from his nervous Saskatchewan MPs and some members of the cabinet, who argue the world’s potash motherlode should be kept under Canadian ownership, even though less than 50 per cent of the shareholders are Canadian.

Mr. Harper’s initial position, dismissing it as an “American-controlled company to be taken over by an Australian-controlled company” was widely translated as signalling the takeover of Potash Corp. would be rubber-stamped. The Prime Minister quickly dialed down his rhetoric on the issue.

But sitting at his desk Tuesday, if he didn’t ink the deal Monday night, Stephen Harper faces an uncomfortable choice between a rock called potash and hard place called politics in trying to sell a compromise that will undoubtedly please nobody.


dmartin@nationalpost.com

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Potash: a political calculation that will do more harm than good
John Manley
From Monday's Globe and Mail
Published Monday, Nov. 01, 2010 5:00AM EDT



Canadians, through Parliament, decided long ago that foreign investment is good for our country. This position has been held by successive governments stretching back to the 1980s, and has resulted in an Investment Canada Act that, on the whole, welcomes investments in Canadian companies.

Under the act, the federal government must approve a proposed investment if it determines that the transaction would be of net benefit to Canada. This usually means ensuring that jobs are protected, that Canadians take leading roles in the governance and management of the business, and that capital expenditures and research and development continue to occur in Canada.

While there is a duty to consult affected provinces, it is the federal industry minister who must make the decision. This is as it should be, and in fact mirrors similar processes around the world.

All of which brings me to the proposed acquisition of Potash Corp. of Saskatchewan by Australia’s BHP Billiton. While I am not privy to all the facts in the transaction, I regret that the debate has become so overtly politicized. The “net benefit” test is meant to be an impartial calculation, not a political one.

In a speech on Oct. 21, in which he announced his government’s opposition to a takeover of Potash Corp., Saskatchewan Premier Brad Wall detailed his concerns around “net benefit” – specifically with respect to jobs and provincial government revenues. These are matters for BHP Billiton to address. I have no doubt that Industry Minister Tony Clement will weigh these concerns. In addition, the minister may wish to seek assurances that BHP Billiton is prepared to stand by its commitments in coming years.

However, Mr. Wall also said that potash is a “strategic resource” and that it is not in Saskatchewan’s interest to allow Potash Corp. to be acquired by a foreign company. This creates an impossible hurdle for any investor to surmount, and essentially tells Potash Corp. investors that they cannot sell their shares to the highest bidder under any circumstances.

The Premier’s “strategic resource” rationale is a political calculation – one that he is entitled to make if he feels he can justify it to his citizens. But the Investment Canada Act exists to derive benefits for Canadians from foreign investors, not to protect resource companies designated as “strategic” at the 11th hour by provincial governments.

If Canada, at the urging of one of its provinces, wishes to block the sale of a resource company, we must be prepared to accept reciprocal treatment in other countries where Canadian firms operate. No one believes that this would benefit Canada. Nor would it benefit Saskatchewan-based potash companies that do business in other jurisdictions.

Our Constitution gives the provinces control over natural resources. Regardless of who owns Potash Corp., that will not change.

In my view, the issue before the federal government is whether it is in the national interest to continue to abide by open, fair and transparent investment rules.

The federal government has been consistent on the need to attract foreign investment. Our leading institutions have confirmed that this is the proper course for a relatively small, trade-dependent economy. So whether in the case of Potash or any other proposed investment, I earnestly hope that the federal government will continue to seek the best possible outcome for Canadians and then apply the rules passed by Parliament. This, more than anything else, will benefit Canada.

John Manley is president and chief executive officer of the Canadian Council of Chief Executives.