Mr Clement is now retired from politics but told The Australian Financial Review he remains convinced his 2010 decision to block BHP’s bid was correct.
“The uniqueness of the case was it was a whole industry being taken over, not just a company, so I felt comfortable that the net benefit to Canada test ... was not in this particular case reached,” he said.
Asked whether a BHP bid for Nutrien would have a better chance of success today than when he was regulating foreign investment into Canada, Mr Clement said the changed focus of regulators would give any theoretical bid a better chance.
“I would say it is probably more likely, the focus is not on large deals and their impact, it is more on national security issues, and of course Australia is an ally and not an aggressive competitor, so I would hazard a guess that these things would be more likely today,” he said.
“Governments are really more interested in national security threats rather than jobs and economic issues when they’re reviewing these types of takeovers. Obviously there is a lot more rigour in assessing Chinese investments, especially from state-owned enterprises or companies close to the Chinese Communist Party.
“That is what’s occupying the time of reviewers now. That is the difference, I would say, compared to 10 or 11 years ago.”
The company once known as the Big Australian is increasingly focused on Canada. Jansen is BHP’s biggest spending item and most important growth project, the company’s global exploration teams have been relocated to Toronto, and BHP is in a bidding war for control of Canadian explorer Noront Resources.
Market filings relating to the Noront bid – which would give BHP early-stage exploration ground in an extremely remote and undeveloped location – have come with an 88-word statement of BHP’s “strong track record” of investing in Canada over “several decades” in everything from diamonds to carbon capture and even protection of boreal forests.
‘Wrapped in Canadian flag’
One significant player in the Canadian mining industry told The Australian Financial Review on condition of anonymity that BHP seemed to be going to great lengths to “wrap itself in the Canadian flag”.
The fact BHP chief executive Mike Henry and chairman Ken MacKenzie were both born in Canada is a coincidence, but one that does no harm to the company’s brand in Ottawa.
“BHP exited the failed hostile takeover of Potash Corp with a tarnished reputation among Canadians,” said Scotia Bank’s Toronto-based analyst Ben Isaacson.
“We have indeed seen BHP increase its presence meaningfully in Canada since then, with respect to both corporate and community activity. This will only help the company increase its optionality for future investments and or transactions involving Canadian companies or assets.”
But Mr Isaacson believes BHP would struggle to win regulatory approval were it to attempt a fresh bid for Nutrien, which formed in 2018 when Potash Corp merged with rival crop nutrient producer Agrium.
Regulatory scrutiny
Mr Isaacson estimates Nutrien’s mines will produce about 58 per cent of Canada’s potash in 2021.
The potash market dominance created by the 2018 merger triggered regulatory scrutiny in six of the world’s most powerful nations: China, the United States, Russia, India, Brazil and Canada.
Approval was secured only after the merged entity agreed to divest a collection of non-core assets, including a $4 billion stake in Chilean lithium giant Sociedad Quimica Y Minera (SQM).
“Now that BHP has sanctioned the first phase of the Jansen project, a combination with NTR [Nutrien] would make anti-trust approval in key export markets more difficult,” said Mr Isaacson.
“The potash capacities between Nutrien and BHP would be more meaningful when Jansen begins than those at the time of the POT/AGU [Potash Corp and Agrium] merger.
“Canada was very protectionist when BHP attempted a hostile takeover a decade ago. It would be difficult for Canada to change its approach if the same company were to try to acquire the same assets again, 10 to 12 years later.”