TSXV:AAA.P - Post by User
Post by
STVPon Jan 17, 2012 7:04pm
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Post# 19414641
Potash to be like Natural Gas in couple years:
Potash to be like Natural Gas in couple years: Many North American Gas producers are un-profitable with gas prices below $3/MCF so given that gas is now at $2.50, many producers will have to shut in wells.
Now switching to Potash, see this article from today:
https://www.cbc.ca/news/business/story/2012/01/17/potash-dbrs.html
With large amount of supplies coming from Saskatchewan in the next decade, you surely don't want to invest in Saskatchewan potash (at least not any of the juniors there - there's no future for them). Ethiopia potash on the other hand will be in great demand for Africa, India and other close by Asian countries due to it's location and low cost potash versus other parts of the world. The reason the potash is lower cost has been well documented on these boards (lower capex, opex, location, etc). I see a future for potash like what we have now for natural gas in the future. Where your potash is located will make the difference between those who can survive lower potash prices. Ethiopia will have the lowest cost producers in the world, so future potash prices is not an obstacle for them. Transportation costs to Asia and other places will also make a big difference especially when the rail system is complete in the next couple years (same time mines should be complete).