The government of Saskatchewan is set to reject the proposed $38.6-billion (U.S.) takeover of Potash Corp. of Saskatchewan Ltd. by Australia's BHP Billiton Ltd., and urge Ottawa to block the foreign takeover of one of Canada's last major mining companies.

Saskatchewan is refusing to back BHP after the world's largest miner declined to pledge a host of economic benefits wanted by the province, including a one-time special tax of more than $1-billion, plus hundreds of millions of dollars more in infrastructure funding, according to people familiar with the situation.

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