minemakers trading at about 2.2c a tonne

ANDREW Drummond of Minemakers (MAK) has followed up on our recent paean of praise for potash and phosphate, the fertiliser feedstocks that are near the bottom of their price cycles.

He sent along a clipping from a London publication headed "Food will never be so cheap again", the article saying wheat prices have fallen 70 per cent from early 2008 and corn has halved. But, it continued, the world's grain stocks are plunging due to the continued growth of the biofuels industry. All this at a time when fertiliser sales are down and water supplies are reaching critical levels.

Then there was the report in the Scientific American predicting the US will run out of phosphate within a few decades. The US along with China, Morocco and South Africa accounts for 83 per cent of world phosphorous production.

Another US science journal, Nature, headlined this: "Phosphate-based fertilisers have helped spur agricultural gains in the past century, but the world may soon run out of them."

That makes the colour drain from your face, doesn't it?

Apart from putting a few gold bars under the floorboards, Pure Speculation suggests running the ruler over any company that has a whiff of potash or phosphate.

And we may as well allow Drummond a plug for Minemakers' Wonarah deposit in the Northern Territory. If MAK were a country, he writes, it would have the sixth-largest resource position in the world. Discounting for cash, MAK is trading at about 2.2c a tonne of JORC-compliant phosphate resources.