Recent exploration work undertaken by BHP Billiton (ASX: BHP) in the Canadian state of Saskatchewan has suggested that the miner's Jansen potash project could just be the beginning of a "basin-wide play" that could see the fertiliser ingredient become one of the company's 'pillars' alongside iron ore, copper, petroleum and coal.
Despite a heavy drop in the price of potash mid-this year, BHP approved US$2.6 billion worth of spending on the Jansen project over the next five years to continue its gradual push into the industry.
Although investors didn't take the news too well at the time, the prospects of potash are now looking more promising. Whilst the miner's CEO, Andrew Mackenzie, confirmed at the AGM on Thursday that investment in the basin would be gradual, he also deemed it "very exciting", suggesting that demand for the resource will likely grow at up to 3% annually over the next 17 years – which can largely be attributed to a rapidly expanding global population.
However, to truly recognise the benefits of the resource, BHP also conceded that Jansen, on its own, probably wouldn't be enough. Mackenzie said: "On its own, Jansen is probably not a big enough resource for us to be a business that would rival our other four pillars, we need several Jansens… The news is good, we feel very confidence that we now have many more Jansens that future generations of management con consider to think about this as a basin-wide play."
BHP's shares are trading 0.5% higher today, whilst rivals Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG) have also risen 0.5% and 0.6%, respectively, continuing their gains as confidence returns to the sector.
Foolish takeaway
Other than the prospects of potash, discussions regarding climate change policy were also a key topic whilst Ian Dunlop's attempt to be elected to the miner's board was also rejected. Furthermore, the company also stated its intentions to continue divesting from non-core assets, although it will take a more "patient and disciplined" approach to doing so.
