ROBIN BROMBY From: The Australian April 15, 2013 12:00AM
Chinese potash bid
FOR all those who take an interest in the relentless acquisition by Chinese interests of valuable resources around the world, note that Elemental Minerals (ELM) has received "an indicative, non-binding, incomplete and conditional" proposal for the acquisition of the company -- and, of course, its huge potash deposit in Republic of Congo.
After the Sundance Resources (SDL) Hanlong experience, investors may be a little leery of these types of offers.
But China does not have many options in terms of its potash supplies. The business is largely controlled by the Canpotex consortium (Canada and the US), the Belarus-Russian crowd, and the Israelis.
Beijing is no doubt keen to break this power, just as it has been working to extricate itself from the grip of the iron ore Big Three. And, with China's arable land area decreasing, they're going to need lots more fertiliser to maintain crop yields.
The ELM feeler comes from Hong Kong-listed Dingyi Group, controlled by Chinese entrepreneur Li Kwong Yuk. The attraction is ELM's Sintoukola project in Congo-Brazzaville which stands at nearly 2 billion tonnes grading over 15 per cent potash.
ELM's stock rose 32.8 per cent on Friday after the "offer" lobbed.
K2P Price at posting:
46.5¢ Sentiment: ST Buy Disclosure: Held
