The big player in the potash industry is Potash Corp whom BHP recently made a $40bill bid.To quote from their website
"Becoming a player in potash is difficult. With limited viable deposits worldwide, multi-billion-dollar development costs and lead times of seven years or more, barriers to entering the industry are considerable. With recent trends pushing global producers to or near their capacity limits, rising demand is likely to challenge supply over the coming years. Substantial barriers to entry; economically mineable deposits are rare, capital costs are high and lead times are long Building a conventional 2-million-tonne mine in Saskatchewan would require an estimated CDN $2.8 billion in upfront capital"
Sitting on a potential resourse of 350-500mill tons,worlds shallowest deposit and open pittable,and capex estimates which will be a fraction of the capital costs quoted above,you can begin to see why a rerating is occurring. This ones a keeper with plenty more upside IMO.
STB Price at posting:
$1.33 Sentiment: LT Buy Disclosure: Held
