mak potash and the next pdn

Loads of fertiliser - The Australian, 25th Jan

ANOTHER subject on which one reader parts company with Pure Speculation is that of potash, and our parallel with Paladin Energy (PDN). The point here was that, like those who passed on buying PDN when its shares were just a few cents, investors might rue not getting into potash and phosphate while these are at the bottom of their price cycles.

If potash is less difficult and expensive to mine than uranium, our reader argues, Third World deposits could be developed cheaply and prices restrained even with increased demand. Interesting point.

However, BHP Billiton (BHP) seems to think there is something going for potash. On Wednesday it said it would spend $US240 million ($265m) to start developing its Jansen project in Saskatchewan.

And, on phosphate, another reader referred us to a report on Joseph Gutnick's US-traded Legend International (which has a big phosphate deposit in Queensland) from BMO Capital Markets in Toronto.

It notes an increase in phosphate prices with market supply tightening, "suggesting additional potential upside to phosphate rock pricing later this year". BMO reports phosphate fertiliser pricing fundamentals have been particularly robust since mid-November. "A good year for fertiliser companies," our reader says.

Two others are putting their money on Minemakers (MAK) and its large phosphate deposit in the Northern Territory. "Sooner or later," one adds. The other reader likes the story, too, with its talk of a 50-year mine life, near-term mining, plenty of cash in the bank and yet a modest market cap.