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Rio, Anglo Could Partner BHP in Potash, Credit Suisse Says

Aug. 22 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest miner, could seek talks with Rio Tinto Group and Anglo American Plc as potential partners for its $15 billion Canadian potash project, Credit Suisse Group AG said.

“A logical partner would probably be someone like a Rio Tinto or another major miner,” Paul McTaggart, a Sydney-based resources analyst with Credit Suisse, said today in an interview. “You probably wouldn’t want a fertilizer player in there because of access to production and pricing information.”

BHP, which this week approved spending of $2.6 billion at the Jansen project, has been in talks with potential partners over selling a stake in the operation, Chief Executive Officer Andrew Mackenzie told reporters this week. BHP expects Jansen to cost as much as $15 billion to build, Deutsche Bank AG analyst Paul Young said yesterday in a note.

“Rio may view Jansen as a viable option, depending on price, with a stake of about 35 percent perhaps making sense,” said McTaggart. “Other potential partners include Anglo American, whom they’ve worked with in the past.”

Joint Ventures

Rio has a 30 percent stake in the Escondida copper mine in Chile, the world’s biggest, which BHP operates. Bruce Tobin, a Melbourne-based spokesman for Rio, declined to comment on any potential potash joint-venture with BHP. Anglo American’s media team didn’t immediately return a phone message seeking comment left outside of normal business hours.

BHP’s spending commitment comes less than a month after the largest producer set off a possible price war. Russia’s OAO Uralkali quit a marketing venture in July that controlled about 43 percent of global exports and signaled prices for the crop nutrient may fall by as much as a quarter.

BHP’s projections for Jansen assume a shift away from the current market dynamic and the expectation that prices will reflect the cost of adding new supply, the company said Aug. 20 in a statement.

To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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