Earlier this month potash was announced as the potential 5th pillar for BHP’s commodity portfolio. Then several days later the Globe and Mail printed an article that discussed the possibility of BHP Billiton attempting a second takeover attempt of PotashCorp. On the surface it is easy to dismiss this possibility as a slow news day, but thinking further on this possibility, would it make sense?
BHP has been developing the Jansen project to produce between 8MM and 10MM tonnes of potash. According to PotashCorp, by 2015 they will have a capacity of 17MM tonnes. This obviously is considerably more capacity, in a shorter period of time, but at a higher price. Remember however that PotashCorp is more than just potash, and BHP has already announced their intentions of shedding non-core commodities.
What could this mean for the market? Contact Schlumpberger Inc to discuss this or other potash market possibilities.