07/31/2013 10:43 EDT | Updated 09/30/2013 05:12 EDT

Saskatchewan premier urges calm over developments in potash industry

REGINA - Saskatchewan Premier Brad Wall is urging people to remain calm about the situation facing the potash industry this week.

The stocks of potash producing companies around the world have been plummetting amid fears of a price war after a Russian company threatened to pull out of a marketing consortium and undercut prices on the world market.

Some financial analysts are postulating that could have a ruinous impact on Saskatchewan's economy.

But Wall said Wednesday it's too soon to tell what impact the situation will have on the province.

"I think it's important we not overreact to the news, as significant or important as it is," Wall said.

He admitted that if potash prices drop the government's spending will be tighter. The budget for this fiscal year is expecting more than $500 million in potash royalty revenues but Wall reminds people that only amounts to five per cent of provincial revenues.

As for the impact it may have on new mining projects and expansions that companies have announced for Saskatchewan, he referred specifically to PotashCorp.

"Potash companies have been saying that expansions will actually continue, not withstanding the news yesterday."

The impact on BHP Biliton's Jansen mine project is still unclear as the company has yet to respond.

K+S, a German company which has begun work on a new mine in Saskatchewan, also did not return a request for comment.