  We report on XMM-Newton spectroscopic observations of the luminous,
radio-quiet quasar PDS 456. The hard X-ray spectrum of PDS 456 shows a deep
absorption trough (constituting 50% of the continuum) at energies above 7 keV
in the quasar rest frame, which can be attributed to a series of blue-shifted
K-shell absorption edges due to highly ionized iron. The higher resolution soft
X-ray RGS spectrum exhibits a broad absorption line feature near 1 keV, which
can be modeled by a blend of L-shell transitions from highly ionized iron (Fe
XVII-XXIV). An extreme outflow velocity of 50000 km/s is required to model the
K and L shell iron absorption present in the XMM-Newton data. Overall, a large
column density ($N_{H}=5\times10^{23}$cm$^{-2}$) of highly ionized gas
(logxi=2.5) is required in PDS 456. A high mass outflow rate of 10 solar masses
per year (assuming a conservative outflow covering factor of 0.1 steradian) is
derived, which is of the same order as the overall mass accretion rate in PDS
456. The kinetic energy of the outflow represents a substantial fraction (10%)
of the quasar energy budget, whilst the large column and outflow velocity place
PDS 456 towards the extreme end of the broad absorption line quasar population.
