BHP Billiton's audacious US$39 billion hostile bid for Potash Corporation of Saskatchewan has had investors reaching for their dictionaries and atlases. The huge deal has been the talk of the financial world for months, and chatter is now at fever pitch.

Last week, the Canadian Government bowed to public pressure and blocked the bid for the country's precious potash market leader. It did so essentially on the grounds that overseas ownership was not of net benefit to the country.

Russians are considering a rival bid, while the BHP chief executive, Marius Kloppers, rethinks his strategy to snare his Canadian prey.

The bid has raised the following questions: What is potash? Why is it so valuable? And, are there other commodities outside of gold, copper and iron-ore markets that might also be worth a punt? Here is a guide to the best, little-talked-about commodities money can buy.


Waxy substance produced in the stomach of sperm whales or regurgitated from them was widely used in perfumes until the ban on whaling. It is now legal again to use ambergris - grey amber - found floating at sea or washed up on coasts. Its rarity makes it much sought-after. Uses include incense, scented cigarettes and aphrodisiacs. Lumps sell for US$20 a gram - about US$500 an ounce.


The girl's best friend halved in value after 2008 and the Diamond Trading Company subsidiary of the De Beers mining giant had sales tumble from US$5.93 billion to US$3.24 billion last year. Gemstones are valued on the four Cs - carat, colour, clarity and cut.

A carat is 200mg (just over 140 make an ounce) and Rapaport Report now quotes a range for single-carat stones of US$1000-US$24,000, depending on quality - only slightly higher than five years ago. But 80 per cent of the 130,000 carats mined each year are unsuitable for gems.

Diamonds are the hardest natural material. Some of the 570,000 carats of synthesised stones manufactured annually are used to cut genuine gems. Almost all cutting is now done in India.

Half the stones are mined in central and southern Africa, but diamonds are also found in Canada, Brazil, Russia and Australia. De Beers accounts for 40 per cent of world production and even more of the sales but Rio Tinto, BHP and others have new mines opening.


The rarest non-radioactive metal is found in meteorites. Gold is four times more common but iridium remains cheaper, despite its price soaring from US$93 an ounce in 2003 to US$760. Only 100,000 ounces of the white metal are mined each year, usually as a by-product of nickel or copper.

The largest reserves are in South Africa, but Russia, Canada and South America mine it. Anglo American is a producer and Johnson Matthey has a long history of refining this member of the platinum family.

Iridium is second only to osmium in density. It is often used as powder by makers of semi-conductors and car spark plugs.


A third of all foods contain palm oil but it is also used for soap, napalm and biodiesels.

Increased demand took its price above US$1000 a tonne last week, a 27-month peak, after a 50 per cent increase during 2009.

It forms the largest part of the vegetable oil market, with 48 million tonnes produced last year, mainly in Indonesia and Malaysia, but Colombia and Africa are big producers and consumers, too.


The rising demand for food means higher consumption of fertilisers, and that has forced up the price of potash. After a decade in which the potash price crept from US$100 a tonne to US$200, it shot above US$600 in 2008, before tumbling in the recession.

However, with the price of wheat and other crops soaring this year, potash has bounced back above US$300 and is forecast to exceed US$500.

Potassium salts were used for centuries for bleaching, soap and glass-making, and could be extracted from wood ashes. In the 1940s, vast underground reserves were found in Saskatchewan, Canada, and deep mines were dug to create the business that BHP Billiton now wants to buy.

A dozen other countries, including Russia and Brazil, produce potash but Canada accounts for almost a third of the 36 million tonnes produced each year, 93 per cent of which becomes fertiliser.


Gadolinite, cerium, thulium, lithium and the other 13 rare earth metals are not actually all that rare. But almost all Western mines were mothballed in the 1990s because cheap Chinese labour undercut them. Now China accounts for 97 per cent of output, its export controls have caused prices to rocket.

The metals are used in computers, magnetic motors, x-rays, lasers and mobile phones as well as in batteries used by the Toyota Prius. Demand is forecast to keep rising by 8 to 10 per cent a year.

China produced 135,000 tonnes of these metals in 2009 but has cut this year's export quota despite protests from the US and Japan.


A troy ounce costs US$2450, well down on the US$10,000 briefly reached two years ago because rhodium is bought by car companies, and the collapse in sales reduced demand.

Catalytic converters account for 80 per cent of the metal consumed, but it is also used to measure flux levels in nuclear reactors and it makes a good coating for cheaper metals. It is also used in making TV screens.

Anglo American, BHP Billiton and other companies produce 25 tonnes a year with South Africa and Russian the main exporters. An increasing amount is being recycled from the converters of old cars.


The world's most valuable spice is made from the dried stigma of the purple saffron crocus. The flowers must be picked in autumn while open, but it takes up to 250,000 separate heads to make one pound (450g).

Iran produces 90 per cent of the world's 300 tonnes annual output, but Spanish saffron is sometimes regarded as the best. They grow in Britain, too - Saffron Walden was a centre - and the spice is so valuable, wars have been fought over it. A pound can cost US$1000.