Since I got into this stock a long time ago I could see where it was headed ...and that's been straight into BHP only a matter of time when they make their move !!!
As you say Spark should be a fine year ...
BHP - thinking long-term about potash
Further insights into BHP Billiton and its potash aspirations. One of the advantages of getting into potash for the major diversified miners is that they are presently earning such healthy cash flows from other commodities they’re not dependent on an early return from potash. Secondly, BHP is said to like potash because it is a late-stage commodity - it is used most intensively in the wealthier nations. Moreover, and thirdly. by the time China’s demand for iron ore plateaus or even declines, then its need for potash will still be growing. Finally, and point four, the majors will be putting themselves in a position for future takeovers of fertilizer companies.
These are the take-home messages from a very long report on BHP and potash in the Australian Financial Review. The article’s writer has clearly been briefed by someone close to the company or by someone who has been following the BHP potash story in fine detail because it is obviously well informed.
The article looks at BHP’s plans for its Jansen project in Saskatchewan, the first greenfields potash development in that province for more than 40 years. I won’t retail all the details about that project: it has been covered in depth here on Potashblog.com. (Also, BHP has a large unexplored potash project in Ethiopia - that is discussed in the previous post on this site, “Corporate Update: Alberta, Israel, Saskatchewan, Ethiopia and Eritrea”).
The article poses this question: “There is little doubt that demand for food is growing globally as the population rises and citizens in developing countries better their diets. But the question is whether expansions by incumbent potash players will boost the supply of the premium fertilizer at a faster rate than the rise in demand, slashing returns for new entrants like BHP”. This point has been raised by some analysts; and Bill Doyle at Potash Corp. maintains the development costs at Jansen could not be justified by present potash prices. Of course, BHP has its eyes on up to five other potash projects in Saskatchewan; the Anglo-Australian company is aiming to produce 16 million tonnes a year of potash.
It is not surprising that BHP has its critics in terms of its potash future. But just go back and read the four points in the first paragraph above. The company does seem to have thought this through.
potashblog.com
AAA Will be a target this year by BHP ...Just like a deer in the headlights...
Bob
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