The fall in potash prices will benefit STB the most. STB is the...

The fall in potash prices will benefit STB the most. STB is the lowest cost producer and even though the margin is squeezed, the company can still make a profit. High costs producer will stop production, and eventually, as cash flow dries up will liquidate. Surviving companies will be able to pick up those assets for a song, and hold them until better prices return.

Therefore, it is important to invest in only companies that can withstand a price correction. All solution mining companies are vulnerable, their opex is around $270/t and rising. When prices dropped to $350/t many small solution miners will close. The majors will survive because of their longer contractual agreements but sustain low prices will make them vulnerable.

BTW, RWD meeting with the Martu people is on Monday. May have a result. STB MC is $100m, RWD is $70m. Both have Lake Disappointment, that leaves $30m for the other assets; Eritrea potash, nickel and gold. A steal IMO.