News

January 11, 2010

Not The Chinese But BPH Billiton Now Threatens Potash Prices

By Sally White

Potash was the agriculture story of last week as BHP Billiton shook the fertiliser industry with news that this could be a great diversification for the mining giant’s portfolio. It is drilling test shafts for potash at Saskatchewan in Canada. Good thouogh it might be for farmers that another major supplier could be entering the market it is bad news for the companies currently controlling the market!

So was the timing, just days after the shares in Potash Corp of Saskatchewan, Agrium and Mosaic jumped by up to 12 per cent on news that Russia potash groups had managed to get a reasonable price – US$350 a ton - in negotiations with China. Share prices have halved from the peaks, helped by the fall in potash prices from China’s best price eighteen months ago of US$600.

BHP’s final investment decisions will not be made until 2011, but analysts such as broker Dahlman Rose’s...