Investor interest in the potash sector reached fever pitch due to the meteoric career of AIM-listed Sirius Minerals, a potash developer with a Yorkshire-based project which fell to earth in 2019 and was taken on by Anglo American. But potash remains an area of significant investor interest. This week we took a position in a US potash project, which we think has some excellent short term prospects and is likely to be a target for acquisition.
One of the big catalysts in global potash markets since Sirius Minerals fell into the lap of Anglo American has been the Russian invasion of Ukraine in 2022. While there were big worries over the impact of that conflict and subsequent sanctions against Russia, it does mean that over half of the global potash supply is covered by a big strategic question mark (when you factor in China's output).
Canada accounts for another 30+%, but US buyers are also alive to the need for large scale potash sources close to the sprawling American corn belt. A staggering 95% of US potash imports come from other countries.
One of the key considerations for Canadian suppliers (and US buyers) is the cost of transportation, with a large slice of the US potash imports from Canada coming overland via rail. Wouldn't it be nice if there was a miner looking for potash much closer to US farmers who is already potentially in the sights of a buyer?
