"Q - Unidentified Analyst
Hi. You and other key players in potash have latent capacity and there's obviously a large Australian mining company that wants to enter the business. How do you feel that this will play out in terms of the stability of pricing in the market when that entry inevitably comes?
Pedro Farah
The entry of…?
Unidentified Analyst
BHP.
Pedro Farah
Okay. Well, the number one is the – well, they have to make a decision. I think they indicated here, they're making a decision next year. We don't know how they're going to go, but, of course, they already sunk some money into it. So every time you sink some that makes the incremental more attractive.
We do not believe the economics exist for additional greenfield capacity in the business right now. I think we'll need a sustained level for quite a number of years of much higher prices to sustain, to provide a return on that investment. However, if that comes, and it may come because despite of logic that may come. That, according to their own reports, will come in about nine years time, eight to nine years time.
That will be Phase I. Phase I is likely going to be non-profitable. So we're talking about nine to 12 years until you see profitability in potash of a new entrant. So in 10 years time at a growth of 2.5%, you basically talk about, 15 million tons of additional demand in the market. So there will be greater demand in the market at that point in time to absorb that.
So in the period, if we can continue to produce what we produce today with no increase, we'll probably be talking about $18 billion of EBITDA just in the period between now and then. And we have – this is without counting the additional capacity that we would have. So if you do nothing, that is already tremendous. So I think there are cheaper ways to get into the market. But should that happen, I think there's still capacity absorbed in that timeframe for the 10 years."
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