Mosaic Co (MOS): Reading Between the Lines of Potash Corp./Saskatchewan (USA) (POT)’s Pursuit of Israel Chemicals

Cap-ex for the three juniors is $2-$3 billion. BHP could spent a fraction of the cap-ex required for Jansen and be in production a few years earlier. Instead, like the Big three, they are waiting to see how the potash market behaves this year and next.

Conclusion:

Saskatchewan has been a great place for miners to operate. But the province could be facing too much of a good thing. Investors need to be careful when junior potash companies promote the benefits of their green field projects in Saskatchewan.

The juniors have far less flexibility. There’s a big difference between being located near key infrastructure and having access to that infrastructure! Competition for rail, ports, skilled labor and water will only get worse. These are possible reasons why the majors, such as PotashCorp, are taking a wait and see approach, and also looking elsewhere.

The article Reading Between the Lines of PotashCorp’s Pursuit of Israel Chemicals originally appeared on Fool.com and is written by Peter Epstein.

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