人為刀俎，我為魚肉：和諧世界

A subsidiary of China's Sinofert has conditionally agreed to an additional purchase of up to US$52 million from the Canpotex under an addendum to a much bigger deal announced earlier by the Canada-based fertilizer marketing agency.

Canpotex said last week that Sinochem Macao, a wholly owned subsidiary of Sinofert, had agreed to buy more than three million tonnes of potash in a US$2.2-billion agreement that stretches over three years.

The additional purchase was determined after "arm's length negotiations based on the prevailing market prices," Sinofert said in a news release Monday.

With the rising demand for potash in China, the deal would "further enrich the operational resources of Sinochem fertilizer and ensure a stable supply of the relatively rare mineral fertilizer, ...." it said.

Because Sinofert is 22 per cent owned by Potash Corp. of Saskatchewan Inc. (TSX: POT.TO), the deal constitutes a connected transaction that must be approved by independent directors, it said. PotashCorp. is currently the target of a heated hostile takeover bid by global mining giant BP Billiton (NYSE: BHP).

Under the deal announced last week, Canpotex will supply about one million tonnes of Canadian potash in 2011, with the supply increasing by 50,000 tonnes in each of 2012 and 2013.

The prices paid for the potash will be subject to negotiated adjustment in relation to market conditions, but the $2.2-billion price is the current estimate. That's broken down as US$600 million in 2011, US$730 million in 2012 and US$870 million in 2013.

Sinofert is a China-based fertilizer company, while Sinochem is engaged in securing fertilizer supplies.

Canpotex is the exclusive offshore marketing company owned by the three Saskatchewan potash producing companies: Agrium Inc. (TSX: AGU.TO), Mosaic Co. (NYSE: MOS) and PotashCorp.