Rio Tinto sitting on vast Canadian potash deposit near BHP mine

Mining giant Rio Tinto (LON, ASX:RIO) shocked the potash market Monday as it unveiled it believes to be sitting on a vast potash deposit in Canada’s Saskatchewan, right by where its rival BHP Billiton (ASX:BHP) is building its touted $12 billion Jansen mine.

Based on Rio’s annual strategic report, the KP405 potash discovery has already been branded as the eighth "tier-one" finding the company has made in the last decade.

"Drilling results indicate encouraging potash grade and thickness," Rio said back in 2012.

But its Russian partner JSC Acron, through its the Canadian subsidiary North Atlantic Potash, has been more enthusiastic, saying there is the potential for a long-life, low-cost mine at the "massive" KP405 deposit.

While a United Nations report expects the world's population to surpass 9 billion people by 2050 (we are around 7.2 billion today), potash, which is a key fertilizer ingredient, is expected to boom as income in emerging economies continues to improve.

BHP recently committed to spending an additional $2.6 billion on Jansen over the next few years, just to gain access to the deposit.

Image: Opening of the Saskatchewan Potash Interpretive Centre in 2006. By Scott Prokop.