The fertiliser market is getting hot. I awoke to the expectation that Union Resources was going to break above 1c today, and that looks sure to happen after BHP announced in today's paper that it was taking over potash miner POTASH CORP in a $39 billion takeover. That of course is going to sporn a grab for fertiliser assets around the world, and in this respect Minemakers Ltd (ASX:MAK) and Union Resources (ASX:UCL) are both minnows holding a world-class asset - a low cost phosphate resource in offshore Namibia. They will both be swept up in no time at all. We might even expect a bidding war.
See the latest news here:
1. Article 1
2. Article 2
Let's not forget that Union Resources also controls the latest undeveloped lead-zinc resource in its prtfolio, even though that resource is in Iran. Of course lead-zinc does not really fit with the group anymore, but they have some compatible interests like Cannington silver mine in Qld. I think they still have that. At the end of the day, they are about world-class, dry bulk materials.
A word of caution though. Rio Tinto and BHP are going to attract the attention of China, and the EU is often sympathetic to China's, if not its own farmers complaints about Anglo-world domination. The EU is not going to be happy with BHP taking over another industry. Expect some opposition to this development. Geez, its great times to be a mining analyst/investor.
We must remember that BHP is making a bid for a potash company, and UCL is phosphate. They are nevertheless compatible and complementary interests.
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Andrew Sheldon www.sheldonthinks.com
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