Potash Corp rules the roost in Saskatchewan

It is after all the world's biggest fertiliser producer: number one in potash and among the top three producers globally of phosphate and nitrogen fertiliser products.

It is the potash assets that BHP wants. The company has six operations that mine vast potash beds beneath the prairie in Saskatchewan and one in New Brunswick. It is a big employer where jobs are scarce, giving it political clout that it could call on if its tussle to extract a full bid price from BHP falters.

While global production of potash - the common name for fertiliser forms of the element potassium - is pretty much shared by the Canadian industry and an oligopoly of Russian producers, Potash Corp is the big swing producer, slashing production when prices are weak and cranking up when farmers start buying again.

It's a bit like DeBeers' management of the diamond market. The end game is to protect the industry from collapses in demand, such as occurred when the global financial crisis hit in September 2008.

The first thing farmers can do when they are worried about costs is to stop applying fertiliser. But they have to resume eventually.

Established as a government-owned group in 1976, Potash Corp went public in 1989, when Saskatchewan province unloaded a 30 per cent stake. Government ownership was completely gone by 2003.

BHP chief, Marius Kloppers, faces a worthy rival in Potash Corp's CEO, Bill Doyle. The 60-year-old calls it as he sees it. Last year when he alerted the market to BHP's smokescreen that it would build rather than buy potash assets, Mr Doyle said it had to be remembered that BHP does not walk on water.

He has a lot at stake in the battle. His stock and options have been valued at about $US350 million at BHP's bid price. Mr Kloppers does not even get close on that score.