Before BHP Billiton (NYSE:BHP) made a bid for Potash Corp. (NYSE:POT), there wasn't a lot of thought from mining companies about entering into that sector, which was confirmed by Teck Resources (NYSE:TCK), which said they haven't been thinking along those lines.
A Teck executive did confirm there was a large demand for the fertilizer.
Senior Vice President for Corporate Development Ronald J. Vance said, "Potash is a commodity that is clearly in demand,” although it's “not something we’ve spent a lot of time thinking about, frankly.”
We'll probably see a bunch of copycats now following BHP, thinking they're missing out of something they must enter into. But BHP is unique in its size and financial position, and not that many miners could follow in their footsteps, even if they wanted to.
For most, like Teck, to go off their core business and enter into one they know nothing about, would probably end up being a disaster.
There's no doubt fertilizer will be a huge sector in the years ahead, but that has nothing to do with the mining industry.
BHP is obviously developing into a different kind of company, and they have the financial strength to do it. Most miners will do best to stick with what they know and let BHP do what they want.
Hopefully Teck will continue to ignore the faddish quality of the pursuit of potash resources and keep doing what they're good at.
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