BHP looks to cash in from Canada potash holdings

(In U.S. dollars, unless noted)

By Cameron French

TORONTO, June 10 (Reuters) - BHP Billiton (BLT.L: Quote, Profile, Research) is hoping for big things from its portfolio of potash properties in the Canadian prairies, the head of the company's special projects group said on Tuesday, although he said it was too early to say when it might decide to build a mine.

The appeal of the industry for BHP and other mining companies has soared recently in tandem with world prices for potash, which have tripled in some cases over the past year. Demand for the fertilizer has jumped along with grain prices.

Speaking at a mining conference in Toronto, BHP's Graham Kerr said the company planned to use its financial might and personnel resources to get into an industry that is typically tough to crack due to the huge costs and long lead times of building deep potash mines.

"We see potash as a highly attractive industry," he said. "Across Manitoba and Saskatchewan, we will pursue multiple projects over the course of the next few years."

Meanwhile, world supplies of potash have been tight as years of relatively stagnant prices made producers reluctant to start new mines.

Potash is currently mined only in 12 countries, and producers are essentially sold out at a time when farmers are willing and able to pay as much as $1,000 per tonne, more than triple last year's going price.

BHP made the decision to get into the business two years ago, and now has more than 7,000 square kilometers (2,700 square miles) of exploration property in the provinces of Saskatchewan and Manitoba.