P o ta s h

Potash, a form of potassium and one of three essential crop nutrients, is applied to plants to help them strengthen their root systems and resist drought. According to Green Markets, world potash production will rise 38% by 2017.

ur lk li s id M y 29 it reduced its r il exports of pot sh to Chin , cutting supply in the spot m rket nd strengthening its position in t lks for the n - tion’s next fixed-price supply contr ct.

Mr. Ab sov, former senior vice-president t Pot sh One Inc. who left the comp ny

bout three ye rs before it w s sold to Germ n fertilizer producer K+S AG in 2011 for $361-million, is proposing to build mine in ethiopi th t would flush w ter- soluble underground pot sh deposits with brine. The resulting liquid solution from the development, p rt of All n ’s d llol explor tion re , would be pumped to ev por tion ponds on the surf ce.

L st month, All n s id ethiopi pproved the comp ny’s environment l, soci l

nd he lth imp ct ssessment for d llol. A fe sibility study w s completed in Febru ry.

The ethiopi n mine is well-situ ted geogr phic

lly to supply fertilizer buyers in Indi nd Chin nd to meet growing dem nd for crop nutrients in Afric , Mr. Ab sov s id. All n forec sts the development will h ve 33% intern lr te of return

nd p yb ck period of 3.1 ye rs, ssuming pot sh price of $430 ton, ccording to the comp ny’s website.

All n , which pl ns to st rt construction of the mine by the end of this ye r nd begin production three ye rs l ter, is in t lks with lenders nd potenti l buyers of its pot sh, Mr. Ab sov s id. Intern tion l Fin nce Corp., World B nk unit, nd Boston-b sed Liberty Met ls & Mining holdings LLC, subsidi ry of Liberty Mutu l holding Co., re Alln sh reholders.

“Our project is right in the sweet spot bec use it h s gre t economics, it is food-rel ted nd it is in country th t needs lot of development,” Mr. Ab sov s id. LON dON • The prospect of new competition from miner BHP Billiton could dyn mite the cr cks ppe ring in pot sh duopoly th t ccounts for 70% of glob l tr de in the fertilizer.

For dec des two export groups, Bel rus Pot sh Comp ny (BPC), which represents producers in russi nd Bel - rus, nd C npotex, its North Americ n equiv lent, h ve set identic l prices in key m rkets such s Chin nd Indi nd h ve often curbed output simult neously.

Th t choreogr phy, which sm ller pl yers lso d nce in step with, is lre dy under fire; four producers in the groups — BPC’s ur lk li, nd C npotex’s three members Pot sh Corp of S sk tchew n, Agrium nd Mos ic — recently greed to p y over uS$100million to settle u.S. ntitrust l wsuit ccusing them of concerted ction to r ise prices.

C npotex nd BPC did not respond to request for comment for this story, but the producers h ve denied the ccus tions, nd ur lk li s id “pot sh producers nd tr ders do not gree with e ch other on prices nd pursue their own pricing policies”.

Their footwork h s lso f ltered under the str in of f lling prices in recent months,

nd the music could stop ltogether if BhP goes he d with the 8 million tonne per ye r J nsen mine in Western Cnd , which would be the world’s l rgest pot sh mine if it opens s scheduled in 2017.

BhP, which h ss id it will not join C npotex, would prob bly look to m ximize volume s les to m ke sense of its uS$14-billion investment, “which would le d to lower prices unless or until some other m jor sites shut down,” ccording to P ul Burnside, n lyst t Cru Group.

The sector, once b ckw ter for glob l investors, moved centre st ge in the 2000s s booming dem nd in emerging economies lifted pot sh prices from round uS$150 tonne to bout uS$1,000 in 2008. Mining pot sh costs round uS$100uS$150 tonne.

Though prices h ve more th n h lved since, f tm rgins

ALLANA POTASH CORP.