WINNIPEG, Manitoba, March 13 (Reuters) – Two junior potash producers working in unusual locations look set to shake off the most bearish industry conditions in five years and open new mines, helped by their proximity to Brazil and Africa, two of the world’s most promising but under-served fertilizer markets.
Tepid global demand for the crop nutrient and sagging prices have crimped profits for producers across the industry and hurt prospects of many of the exploration companies aiming to develop new mines for the already-oversupplied industry.
The world’s biggest fertilizer company, Potash Corp of Saskatchewan , slashed 1,000 jobs in December, while Mosaic Co, a major U.S.-based producer, last year suspended part of its expansion plans.
Yet prospects are bright for Allana Potash Corp and Verde Potash PLC, two small producers developing low-cost potash mines in Ethiopia and Brazil respectively, far from the world’s main potash regions of Western Canada and eastern Europe.
Each promises a shortcut to fertilizer-hungry markets and has attracted strategic or government backing, removing some of the risk.