Tim Treadgold has been writing about the mining and oil industries for more than 40 years.
Rising prices for potash, an important fertilizer which boosts crop yields, has sparked a rush in the mining industry as big and small companies look for ways to cash in.
BHP, the world’s biggest miner, has the most ambitious plan as it mulls the best time to start production at its $10 billion Jansen project in Canada. But even in Britain, a country which closed most of its mines decades ago, is working towards starting a $3 billion potash mine in North Yorkshire.
Other potash project developers in locations as far apart as Australia and Eritrea, on the horn of Africa, are hoping to catch strong demand from farmers who use the fertilizer which helps crops retain water while also improving their taste and overall quality.
What the miners see is a mineral enjoying a strong price revival triggered by rising demand and limited increase in supply which comes mainly from Canada, Russia, Belarus and China. Over the past 12-months the price of potash has risen by close to 25%, reaching $350 a ton.
The miners expect the price to continue rising, perhaps getting back to the $525/t reached in 2010 when BHP made its first attempt to enter the potash business with a controversial $39 billion takeover offer for Canada’s potash champion, the Potash Corporation of Saskatchewan, which has since merged with Agrium to form a new business called Nutrien.