Potash or potassium carbonate has several industrial uses but is, in the main, used in agriculture. According to the Wikipedia entry: “Potash is important for agriculture because it improves water retention, yield, nutrient value, taste, colour, texture and disease resistance of food crops. It has wide application to fruit and vegetables, rice, wheat and other grains, sugar, corn, soybeans, palm oil and cotton, all of which benefit from the nutrient’s quality enhancing properties”.
The mineral exists mainly in deep mine deposits in various countries but some of the world’s largest known potash deposits are in Saskatchewan, Canada.
Yesterday BHP-Billiton made a $US38.56b all cash bid for Potash Corporation of Saskatchewan, to secure ownership of one such deposit. It would enjoy synergies with the nearby Jensen deposit that it already owns. It recently bought a nearby junior Canadian potash company Athabasca Potash.
These are early days and Potash Corporation have rejected the bid – the final price might go to $US 60b.
It is a stunning move – the current bid is about equal to one-third of BHP-Billiton’s market capitalisation or, to provide perspective, more than the estimated cost of Australia’s proposed high speed broadband network. The move while not as big as the (fortunately) failed bid for Rio Tinto it is still enormous. In the press it is variously described as a merger/takeover.
I’ll watch developments but the planned takeover probably reflects expectations of strong continued growth in global food demands. As the developing world develops it will not only want steel, coal and concrete – it will also want to feed itself better.
This quote from the Australian says it all:
People in Asia eat only 27.8kg of meat per head each year, compared with 123.2kg in North America and 74.3kg in Europe. As Asians become richer, their consumption of meat is expected to rise, and so more wheat and grain will be needed to raise cattle.
It has been estimated that it takes 7kg of grain to produce every kilo of beef. The population of the world is also expected to increase by half to more than nine billion by 2050, putting further pressure on food production.
Fruit and vegetable consumption is forecast to rise by a quarter to 2 billion tonnes a year in the next decade, while demand for grains and oilseed is expected to rise by a fifth.
With the supply of agricultural land declining in some areas as a result of rapid urbanisation, existing land will have to become more productive. Countries such as India and China are therefore expected to use much more fertiliser, increasing demand for potash, nitrogen and phosphates.
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Bold move like the similar move on Olympic Dam uranium in SA. The pundits queried the wisdom of that at the time but not anymore, which is a problem for the big player now. It eyes off something and all heads suddenly snap to attention at the longer term trends it signals.
Greens in general are opposed to Big Biz recognizing trends and swallowing up smaller players like this and in particular would be averse to ‘unnatural’ fertilizers like potash. As watermelons generally, they see it as one more conspiracy against the local, small and natural is beautiful meme. Basically big capitalist jackboots stomping on their Gaia with the evidence of that all around us in even the air we breathe now. That natural is beautiful meme belies their stance on abortion, IVF for gays and GM crops, etc and they can come over all emotional over boat people, yet be as xenophobic as any on a Big Australia, basically because mankind is a nasty interloper on ‘their’ precious Gaia. At it’s worst they advocate population control but don’t seem too keen on volunteering to be first. A real witches brew for some onlookers, albeit their are contradictions elsewhere in the political spectrum.
That’s where I found the floods in Pakistan and calls for aid an interesting conundrum for these watermelon types in this article here-
http://www.thegwpf.org/the-observatory/1378-indur-m-goklany-global-death-toll-from-extreme-weather-events-declining.html
Now I’ve definitely heard the private argument that why should we bother helping this mob of terrorists and terrorist lovers to survive and kill our boys anyway and I definitely think that’s a factor in the slowness and amount of aid flowing. Ban Ki Moon was certainly out begging in earnest on that score. But notice that article’s findings for the Green watermelon crowd. You want to curb all the factors that ameliorate death by disaster it lists and you’re certainly arguing for Nature to take its course. There’s certainly some anti-Muslim sentiment around to support that view in this particular disaster but not that strange a bedfellows when you think about them. Green watermelons can be innately selfish in a curiously individual way, that belies their overt public kumbaya facade. Not my cup of tea really.