Potash Corp stock hits record after CEO outlook

By Roberta Rampton

WINNIPEG, Manitoba, June 5 (Reuters) - Shares of PotashCorp (POT.TO: Quote, Profile, Research) hit a record high on Thursday as its chiefexecutive gave a rosy outlook for the world's largestfertilizer company to a Merrill Lynch conference.

Record grain prices have spurred demand and prices forfertilizer, sending the Toronto-listed shares of Potash up morethan 175 percent in the past year, reaching a record C$221.75on Thursday.

Bill Doyle said the company is prepared to mine 50 percentmore potash fertilizer annually in coming years, at prices thatare poised to rise further still.

"Yet many investors seem more concerned about what's in therear-view mirror and whether they missed the ride, with theresult that our forward multiples ... are the lowest I canremember," Doyle said.

"We encourage our shareholders to keep their eyes on theroad ahead because our earnings potential is far greater thanwhere we've ever been before," he said.

Potash shares were up 4 percent or C$8.40 at C$220.90 inToronto late on Thursday.

Doyle said surging world demand for food will mean farmersneed to continue to produce record crops, and said he does notbelieve crop prices will turn lower any time soon.

Potash producers have not been able to produce as muchfertilizer as customers want to buy for almost a year, andDoyle said he expected the shortage would last into 2009.

"We're very excited because we know for sure between nowand June of 2013, there's no new greenfield mine coming onanywhere in the world," Doyle said.

There has been a flurry of interest in exploration inpotash belts in Russia and Canada, but Doyle cautioned it takesfive to seven years and at least $2.8 billion to build a newpotash mine, plus infrastructure costs.

"Anyone looking at greenfield (projects) must justify theirproject on pricing in years eight and beyond, and that's a verybig bet to make," he said.

Agrium Inc (AGU.TO: Quote, Profile, Research), another key producer in Canada'spotash belt in the western province of Saskatchewan, isexamining whether to build a new mine.

Last month, BHP Billiton Ltd (BHP.AX: Quote, Profile, Research) bought out a Canadianjunior potash mining partner.

BHP has said it will decide whether to move forward onpotash plans in 2010, Doyle said, meaning the mining majorwould produce potash in 2017, at the earliest.

"We'll wait and see what happens there, but it's notimmediate. There's no quick fix here," Doyle said.(Reporting by Roberta Rampton; editing by Rob Wilson)