According to Saskatchewan energy and resources ministry, BHP has 56 potash exploration permits covering almost 1.44 million hectares, the most extensive land holdings of any company.

Its Jansen project, east of Saskatoon, is expected to receive a final go-ahead next year, with production starting in 2015. BHP has already earmarked $1.2-billion for the project, and has started work on two mine shafts.

It is also evaluating two other projects, known as Melville and Young. If all three are brought to production, BHP's capacity could reach 16 million tonnes a year.

Potash Corp. has an annual capacity of 11.3 million tonnes, but is two-thirds through an expansion plan that would raise capacity to 17.1 million tonnes in 2015.

Asked to comment on BHP's non-participation in Canpotex, Potash Corp. responded, "That question is a long way off."

Eoin Treacy's view
BHP Billiton likely to keep key mine out of potash cartel - Thanks to a subscriber for this interesting article by Bernard Simon which appeared in the Globe and Mail. Here is a section:

According to Saskatchewan energy and resources ministry, BHP has 56 potash exploration permits covering almost 1.44 million hectares, the most extensive land holdings of any company.

Its Jansen project, east of Saskatoon, is expected to receive a final go-ahead next year, with production starting in 2015. BHP has already earmarked $1.2-billion for the project, and has started work on two mine shafts.

It is also evaluating two other projects, known as Melville and Young. If all three are brought to production, BHP's capacity could reach 16 million tonnes a year.

Potash Corp. has an annual capacity of 11.3 million tonnes, but is two-thirds through an expansion plan that would raise capacity to 17.1 million tonnes in 2015.

Asked to comment on BHP's non-participation in Canpotex, Potash Corp. responded, "That question is a long way off."

My view - Potash mining is an oligopoly with a relatively small number of major producers dominating the market. BHP Billiton is familiar with such scenarios since it is part of a triumvirate dominating the iron-ore market. The company has set its sights on participating in the potash market and is one of the few globally with the heft necessary to achieve such a feat.

Potash Corp of Saskatchewan (0.65% yield) has been ranging mostly above the 2010 base since BHP Billiton made its initial offer for the company in a takeover attempt that was blocked. However, it failed to hold the move above C$50 last month and has returned to test the area of the September low. A clear upward dynamic would now be required to question potential for a further test of underlying trading.

BHP Billiton is a European dividend aristocrat and yields 3.9%. The share broke downwards from a type-3 top in August and has subsequently encountered resistance in the region of the 200-day MA. A sustained move above 2100p will be required to question current scope for an additional test of underlying trading.