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

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.

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