Will potash become BHP Billiton Limited's fifth pillar?

The global population is set to soar and BHP could be a key beneficiary.

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It seems that for BHP Billiton Limited's (ASX: BHP) chief executive Andrew Mackenzie, the future is looking as bright as ever.

Although the mining industry has been the focus of investors' attention in recent weeks due to the collapsing prices of iron ore and copper, Mackenzie expressed his confidence for the future in an interview conducted by The Australian Financial Review stating that BHP is well positioned for the end of the iron ore boom.

When Mackenzie arrived at the mining giant early last year, he implemented what is known as the "four pillar" strategy whereby the company would focus on iron ore, copper, coal and petroleum assets. The strategy was designed to reduce unnecessary spending and instead focus on the most profitable and promising projects while divesting from those which would be unable to meet new higher standards.

However, it now appears likely that potash will become a fifth pillar. While a United Nations report expects the world's population to top 9 billion people by 2050 (it is around 7.2 billion today), potash, which is a key fertiliser ingredient, is expected to boom as income in emerging economies continue to improve.

BHP has committed to spending US$2.6 billion on the Jansen project in the Canadian state of Saskatchewan over the next few years with Mackenzie stating "we think that what we have will translate to many decades of very high return and attractive projects for the company."

While the four pillars and potash operations will be the company's focus going forward, it is looking to divest from its nickel assets as well as its African iron ore assets. It is also expected to sell its South African aluminium operation.

Foolish takeaway

Although it would be unwise to invest in the mining sector right now due to the high level of volatility and uncertainty, I am still a fan of BHP's prospects going forward. Unlike others in the sector, such as Rio Tinto Limited (ASX: RIO) or Fortescue Metals Group Limited (ASX: FMG), BHP is not as heavily reliant on iron ore for profitability (given its higher level of diversification), while it appears to be taking all the right steps to capitalise on other long-term global developments.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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