The current three major producers of potash, Potash (NYSE:POT), Mosaic (NYSE: MOS) and Agrium (NYSE:AGU), aren't convinced the latest and formidable competitor BHP Billiton (NYSE:BHP) will be able to produce the fertilizer at profitable levels because of starting from a new mine.
Current potash prices of just under $400 a ton is the reasoning behind it, with the companies believing starting from scratch isn't a viable business model.
All of the big three are producing potash from existing mines rather than opening up new ones.
BHP disagrees, saying the strength of the company and the tremendous resource of the Jansen project make it a viable and profitable venture.
Of course saying that and delivering on that promise and assertion are two different things.
One thing they do have going for them is the quality of the Jansen project, which has a high concentrate of potash within it.
2 comments:
Who wrote this piece of trash article? It reads like an 8th grade homework assignment.
The potash industry is still using 60+ year old technology. They believe they can set the product price to pay for their technological inefficiency. There is better technology available with an expected 80% reduction in CAPEX and OPEX. There are also excellent deposits in many other countries. If the Canadian industry does not get efficient, it will sit idle while others make the product.
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