Fertilizer

[cottonpicken]

http://www.bloomberg.com/apps/news?pid=20602013&sid=agkkcMeEjjUk

[jensend]

looks like potash prod'n is expected to be profitable. is the announcement of idling fifty per cent of capacity a reference to last spring not this month because it should have made big headlines?

[Zaphod]

On the same topic. Hmm.

(Reuters) - China's Zhongchuan International Mining Corp, has signed a deal to build a huge potash base in the Canadian province of Saskatchewan to ease its own tight supply of the fertiliser, the official Xinhua news agency said on Monday.

The deal will allow the private Chinese mining firm to explore potash in an area covering 96 square kilometres, with an expected annual production capacity of 3 million tonnes, Xinhua said, without naming its source for the information.

[Zaphod]

Looks like the Chinese don't like being held for ransom either.

[jensend]

i wouldn't bet that the chinese or the australians are looking to break the cartel.

[bucket]

Could that be athabasca potash or western potash they are looking to develop. Or maybe buying Mosaic?

[Zaphod]

The report doesn't say but it could blow the cartel out of the water. The Chinese would have enough money to do it.

[jensend]

but why would the chinese blow the cartel? it would be of great value to them. it would guarantee the financing of the purchase of the asset.

[boarderbloke]

What if the Chinese export all "their" production back to "their homeland"(China), might that leave retailers scrambling to source from fewer suppliers?? I hope none of you, think for a moment, that China would do us any favors as far as pricing goes. China buying one of SK mines wouldn't be like they found and developed a new source of fertilizer, we're still talking about the same number of mines in the world. Just that "they" would have their own supply and wouldn't have to work a deal out with others.

[Zaphod]

I agree that this is a strategic move by the Chinese. It's not just a financial deal. Securing potash for their own farmers will help improve food security and that's a top priority for the Chinese government.

[Zaphod]

It's important to remember that we use relatively little potash in western Canada. Most of it gets exported. It's nitrogen and phos supplies we need to be most worried about.

[Zaphod]

I think the biggest concern here is for those who own POT or MOS shares.

[ado089]

I think this is a prime example of what catering to shareholders instead of customers does to your long term viability as a company. Not a single tonne of that potash will stay in north america. What it will do though is take 3 mmt/yr of demmand out of the system and likely send a message to the other players in the fert/ag world that free enterprize functions perfectly well and if you make too much money someone else will notice and try to make slightly less until there is a balance between profit and competition. Maybe mr Doyle missed that lesson at buiness school.

[bucket]

BHP is to buy potash corp. Great - another saskatchewan success story to be sold out to foreign interests. The greenfield mines in saskatchewan are going to have to be built sometime. Rather than have bhp buy assets it would be better in the long run to build the greenfield site.

Don't get me wrong - I am not a socialist but I am getting tired of watching Saskatchewan companies that are world leaders give up. If anything it should be the other way around - where Saskatchewan companies are looking for asset values abroad.

[boarderbloke]

potash companies haven't and won't for sometime, develope the "greenfield mines" because they understand something farmers never likely will, that being, the more supply the lower the price.