http://www.theaustralian.com.au/business
RIO Tinto has declared it is sitting on a big potash deposit in Saskatchewan in the same basin where its rival BHP Billiton is spending $US3.8 billion ($4.2bn) just to be ready to mine the fertiliser ingredient when global food demand warrants it.
In its annual report, Rio described the KP405 potash discovery as the eighth “tier-one” discovery in the past decade by its exploration group. “Drilling results indicate encouraging potash grade and thickness,” Rio said.
“Higher nutritional standards, population growth and limited arable land make potash a critical factor in maintaining global food security.” Rio’s Russian partner, Acron, has been more animated, saying there is the potential for a long-life, low-cost mine at the “massive” KP405 deposit.
BHP chief Andrew Mackenzie describes potash as a potential “fifth pillar” of BHP’s commodities business, indicating the potential he thinks the company has in Saskatchewan’s Elk Point Basin.
BHP last year approved a $US2.6bn spend to gain access to the deposit, bringing total approved spending to $US3.8bn before it has made a definite decision to mine.
Rio has been more tentative.
It sold its potash ground in Canada and Brazil to Brazil’s Vale in 2009 to reduce debt, only to return in 2011 through a joint venture with Russia’s Acron in a deal so small the price and stake sizes have still not been announced.
There has been little talk of potash from Rio, apart from a brief mention in December by minerals boss Alan Davies, who has taken over the deposit from the exploration unit.
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