PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 21:59 UK, 29th Nov 2010, by Agrimoney.com
BHP shows has not given up on Canadian potash

BHP Billiton showed it had not given up on potash in Canada, despite being snubbed over its $39bn bid for PotashCorp, by buying a permit to explore nearly 84,000 acres of prime territory for the nutrient.

The mining giant, which two weeks ago ditched plans to buy PotashCorp after Canada's government objected to the deal, bought the licence to survey a chunk of the province of Saskatchewan from Acron, the Russian fertilizer group.

While the price of the deal was not disclosed, Acron said that "both parties were pleased with the successful completion of the transaction".

The sale reflected the "strong recovery of [the] potash permits market in Saskatchewan and of the potash industry in general", Acron added.

Bubbling sector 

The deal adds to BHP's existing potash assets in Canada including the Jansen greenfield mine site, which was acquired two years ago, and the Athabasca Potash interests bought earlier this year.

The mining group's potash interests are centred in Saskatchewan, where PotashCorp is also based, and whose provincial government lobbied heavily for the BHP takeover to be rejected.

The deal also continues a round of activity in the sector, which has gained increasing investor profile through the PotashCorp bid, and the likely impact of firm crop markets in boosting fertilizer prices.

Separately, Western Potash on Monday unveiled a Can$40.0m share and warrant placement to raise money for exploiting its Milestone site in Saskatchewan.

Western Potash, which was advised by former Athabasca Potash chairman John King Burns, said last week it was attempting to "fast track" the development of Milestone, which encompasses 500 square kilometres of Saskatchewan.

And Encanto Potash unveiled a plans to raise Can$5.5m through a share offering to develop its Muskowekan project in Saskatchewan.

Share reaction

Encanto Potash shares closed down 6.9% at Can$0.405. Western Potash shares tumbled 10.1% to Can$1.09. 

In Moscow, Acron shares closed up 2.7% at 955.08 roubles.

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