Potash in recoveryBusiness with the Wall Street Journal
- PURE SPECULATION: Robin Bromby
- From:The Australian
- July 26, 201012:00AM
https://www.theaustralian.com.au/business/mining-energy/analysts-bullish-on-zinc-lead-in-long-term/story-e6frg9ex-1225896777801
Excerpt >
Potash in recovery
SCOTIA Economics, part of Canada's Scotiabank, devotes a good portion of its latest commodity bulletin to potash. Its bottom line is that world potash shipments are normalising after last year's slump and a significant price recovery awaits in 2011.
The report notes that farmers around the world "mined" the nutrients out of the soil in 2009 to cut fertiliser costs, but this year have to replace those soil nutrients. In the first four months of 2010, Brazilian potash imports climbed by 720 per cent and China's by 36.7 per cent. Potash sales to India look as if they will have a strong year.
The expectation of a price rebound (although not to 2008's record) will be encouraging news for ActivEX (AIV). The company has just received its final scoping report on the Lake Chandler potash project north of Merredin in Western Australia.
On Wednesday, the junior noted that while potash prices have halved, the mining boom here has caused rising labour and materials costs. It says Lake Chandler would be a marginal proposition at today's prices. But the deposit is only 50km from the main east-west railway line, giving Lake Chandler a transport cost advantage, so AIV says it will keep working on the project expecting improved fertiliser demand.