By Rod Nickel WINNIPEG, Manitoba (Reuters) - Two junior potash producers working in unusual locations look set to shake off the most bearish industry conditions in five years and open new mines, helped by their proximity to Brazil and Africa, two of the world's most promising but under-served fertilizer markets. Tepid global demand for the crop nutrient and sagging prices have crimped profits for producers across the industry and hurt prospects of many of the exploration companies aiming to develop new mines for the already-oversupplied industry. The world's biggest fertilizer company, Potash Corp of Saskatchewan, slashed 1,000 jobs in December, while Mosaic Co, a major U.S.-based producer, last year suspended part of its expansion plans. Yet prospects are bright for Allana Potash Corp and Verde Potash PLC, two small producers developing low-cost potash mines in Ethiopia and Brazil respectively, far from the world's main potash regions of Western Canada and eastern Europe. Each promises a shortcut to fertilizer-hungry markets and has attracted strategic or government backing, removing some of the risk. Shares of Verde, which is still in the early stages of project development, have doubled in value since July 30, when Belarusian Potash Co, one of the world's biggest potash traders, broke up and potash prices went into free fall because of the prospect of increased competition. Allana stock is slightly higher over the same period even as Karnalyte Resources Inc, owner of a similar project in potash-rich Western Canada, has lost about half of its value. The faith in Allana and Verde shows investors are still willing to bet on the long-term fundamentals of potash, which are based on population and income growth in the developing world fuelling greater food demand. Even so, only junior projects with such unique, built-in advantages are likely to proceed in the near term. MINING POTASH IN AFRICA Allana's 1-million tonne Danakhil mine in Ethiopia may turn out to be the world's first major greenfield potash mine in seven years if it opens on schedule in late 2016. The estimated $642 million cost of building the mine is lower than the cost of conventional underground projects. It uses a technique that pumps water into shallow potash beds, producing a brine that is evaporated on the surface, leaving potash-bearing crystals. Allana would provide significant domestic potash supplies for African crops and benefit from short distances to established buyers in India and Southeast Asia. "Allana is a relatively modest cost cap-x project with low operating costs as well, so they have fared better," said Raymond James analyst Steve Hansen. "Even in a low potash price environment, you could still argue the project has some merit. There's also no competition so far - unlike in the Western Canadian province of Saskatchewan. "You're talking about competition in the case of Saskatchewan for infrastructure, for railways, for water, for the port, so no doubt that has its own impact on the finance-ability of junior projects there," Allana Chief Executive Farhad Abasov told Reuters, referring to the province where most of Canada's potash is mined. Location is also the critical selling point for Verde Potash, which aims to satisfy a sliver of Brazil's huge demand for fertilizer to boost corn and sugarcane yields. Verde plans to take potash from the surface at its mine in the Cerrado region to produce a modest 300,000 tonnes or more a year of ThermoPotash, a special fertilizer tailored for Brazilian soils. That capacity represents just over 10 percent of the annual capacity of Potash Corp's Rocanville, Saskatchewan, mine. A second phase would produce conventional potash. The project's pre-feasibility study, a preliminary assessment of its viability, is due later this month. "If you could choose one place in the world for a potash mine, I think the consensus would be Brazil," Cristiano Veloso, chief executive of Verde Potash, said in an interview. "And then if you could pick one location in Brazil, it necessarily would be where we are in the Cerrado region." The Cerrado is Brazil's grain belt, where more than half of its fertilizers are consumed, according to Verde. Brazil relies on foreign sources for 90 percent of the potash it uses, with Vale SA operating the country's only potash mine. "The one thing you do hear that's positive in the potash sector is Brazil keeps importing record amounts every year," said John Chu, analyst at investment bank AltaCorp Capital. "Obviously if you're based in Brazil and you can provide that domestic production, that would be a positive." ADDING TO OVER-SUPPLY? But adding to a potash surplus comes with considerable risk. Global potash production capacity currently exceeds demand by 15 million tonnes, or 27 percent, and further build-out in the next few years may limit any price rebound, according to a March 5 report by TD Economics senior economist Sonya Gulati. Germany's K+S AG and Australia's BHP Billiton Ltd already have new Canadian mines in the works, although low prices have caused BHP to hold off on final approval. The spot Vancouver, British Columbia price was $300 per tonne in January, the lowest since 2008 and well below the long-term potash price of $430 assumed by Allana in its feasibility study, although prices have since risen in some markets. It's also no sure bet when Africa's fast growth will translate into fertilizer demand. "Africa will one day be a very important market. The issue is people have been saying that for 20 years," said Mosaic Chief Financial Officer Larry Stranghoener, on Wednesday, adding that his company has no plans to significantly invest there. FUNDS FROM HIGH PLACES Powerful partners help offset some of those risks. Verde scored a $105 million commitment in loans, equity and grants last month from the Brazilian government, worth 90 percent of the construction cost for its first phase. Allana signed a partnership in February with the world's sixth-largest potash producer, Israel Chemicals Ltd, which agreed to buy at least 16 percent of Allana's regular shares and the mine's output. The company's Ethiopia site has also brought on board the International Finance Corp, a member of World Bank Group, which took an equity stake and agreed to help with construction. Western Canada is more stable politically than East Africa, but in the current environment to finance a potash project, "you're better off being in a developing nation," Allana's Abasov said. "We're talking about fertilizer, a food-related product, in a country that has been experiencing recurring famines until recently. There's a great overlap of all interests." (Editing by Jeffrey Hodgson and Frank McGurty)
"I was deeply unhappy, barely containing secrets that would soon devastate me emotionally and send me to the brink of suicide at the height of my fame."
Legendary competitive eater Joey Chestnut reveals what happened to his body after he ate 76 hot dogs and buns in 10 minutes
Joey Chestnut told Insider that he starts sweating profusely after the competition, and people have told him it smells like hot dogs.
- The Guardian
It was the second warning Cassidy Hutchinson had received before her deposition, cautioning her against cooperating with the panel
- CBS News
One of the girl's family members jumped in the water and beat the shark off of her until she was free, officials said.
- AZCentral | The Arizona Republic
In a Republican gubernatorial debate full of cringe-worthy moments, their answers on whether the 2020 election was stolen were the creepiest of all.
The Washington Examiner published the blistering editorial in the wake of bombshell testimony from the Jan. 6 committee hearings.
- NBC Sports BayArea
Gary Payton II reportedly finalizing a three-year deal with the Portland Trail Blazers is a massive loss for the entire Warriors organization.
- The Wrap
James Corden Refuses to Call Peter Doocy by Correct Name While ‘Filling In’ as White House Press Secretary (Video)
Corden decided Doocy's name was David and didn't leave any room for argument
This isn't your average swimsuit.
- Women's Health
Addison Rae just wore the most stunning nude slip dress for an in-bed photoshoot. The pics? Super sultry! Here are the best dupes for her silky tank dress.
- NY Daily News
The Jan. 6 committee apparently suspects that the Trump loyalist who sought to pressure bombshell witness Cassidy Hutchinson into keeping quiet was not only acting as an intermediary for White House Chief of Staff Mark Meadows. The panel reportedly wants to interview the unnamed “associate” of Meadows as a “fact witness” to what the former President Donald Trump and his chief of staff were ...
- Consequence of Sound
The cover art apparently pays homage to the Renaissance painting of Lady Godiva, as well as Bianca Jagger's grand entrance on horseback at Studio 54 in 1977. Beyoncé Reveals Cover Art for Renaissance Alex Young
GOP Sen. Pat Toomey says Trump's chances of winning the party's 2024 presidential nomination are 'much more tenuous' following the January 6 committee's hearings
Sen. Pat Toomey said the Republican Party would likely have a "stronger candidate" than Trump in 2024 after Cassidy Hutchinson's bombshell testimony.
- Business Insider
An American Airlines passenger drove to Denver airport to rebook his seats after the airline's customer-service center left him on hold for nearly 4 hours
Brian Driver told The Wall Street Journal it was "by far the worst airline call center experience I've ever had."
- Kansas City Star
When the police arrived on the scene, the woman was lying on top of her car, and the prison inmates were shouting, officials said.
- Wolverines Wire
The Big Ten is going to be fascinating in 2024
Trump's 'girth would prevent him from actually getting to the steering wheel' of his SUV, former Secret Service agent says: 'I don't see this president ever being able to do that. Ever.'
"Trump's not a little guy, right? And the space to actually be able to lunge towards the wheel is not that big," the former agent told Insider.
- The Telegraph
The Prince of Wales enjoyed a “very emotional” first meeting with his granddaughter, Lilibet, a senior royal aide has revealed.
- USA TODAY Sports - Golfweek
Pat Perez’s outlandish shirt, Fred Couples burying him and Phil Mickelson adding scathing takedowns among latest LIV Golf news
Pat Perez sported a shirt featuring $100 bills to the LIV Golf pro-am party, which seemed fitting.
- In The Know by Yahoo
A teacher shared the shocking exchange he had with one of his students while they were playing "pretend restaurant."