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The battle for potash resources began when BHP Billiton launched a hostile bid for the Canadian PotashCorp last month. And it has escalated since then. A Chinese private firm's potash base in the Canadian province of Saskatchewan is likely to become the next target.
China's Zhongchuan International Mining Corp is a private company that owns the potash base. Since it won exploration rights, the company has discovered 893 million tons in reserves of the mineral. However, the company is facing funding pressures.
Sun Ximing, President of Zhongchuan Int'l Mining Corp. said "The potash reserve we discovered has been very close to the entire reserves inside China of 1 billion tons. However, we are still having trouble with funding. The total investment needed is 2 billion US dollars to reach the production capacity of 3 million tons. It's a lot of pressure."
Experts say the production of 3 million tons could last 50 years. If all of that could be sent back to China, it would slash the country's reliance on imported potash by half. But because of the funding issue, the project is being eyed by several international mining giants.
Sun Ximing said "Many foreign companies contact us, wanting to collaborate on the project. However, we consider potash a scarce resource, it means a lot to agriculture. So we don't want to collaborate with them."
Zhongchuan International Mining Corporation says BHP is one of the pursuers and has promised to provide funding.
What does BHP aim for:
Potash, an important fertilizer in agriculture, is distributed unevenly across the world. Experts say the purpose of BHP Billiton's bid for Canada's Potash Corp is to manipulate the global price of the resource by taking control of the world's largest reserve. Full story >>
Response from China:
China says not so fast the country may launch an anti-monopoly probe into BHP Billiton's bid for Canada's Potash Corp last month. It's an indication that China, as the world's biggest importer of fertilizer, is weary of further concentration in the market. Full story >>
Experts say China should safeguard its potash resources overseas. They say it's not just for the sake of agricultural security, but also to prevent the monopolization of the global potash industry. Full story >>
BHP's bid for Potash Corp. has not yet been approved, but the Chinese market has already felt the impact. Prices of potash are rising fast. Experts say Chinese farmers will suffer from the price hike. Full story >>
The world largest fertilizer supplier, Canada's Potash Corporation, is seeking talks with possible counter-bidders. Potash is fighting off a 39 billion U.S. dollar hostile takeover offer from BHP Billiton. Speculation is spreading, with rumours China's Sinochem Group made inquiries with the Potash board late last week. Full story >>