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Rio Tinto Eyes Russian Potash: Report

NEW YORK ( TheStreet) -- Rio Tinto (RTP) executives have reportedly traveled to Russia, where they're looking into taking a stake in the Russian potash producer Uralkali.

Rio Tinto is considering the purchase of 10% to 15% of Uralkali, according to a report in the Moscow-based business newspaper Vedomosti, which was cited by Reuters in a dispatch Wednesday morning.

>>Potash vs. BHP From A to Z

Rio Tinto got out of the potash business by selling its assets to Brazil's Vale (VALE - Get Report). But, Reuters reports, Rio CEO Tom Albanese evidently told analysts at a conference late last month that his company wanted to get back into potash, suddenly the world's hottest commodity.

Rio Tinto is perhaps feeling pressure -- much like the Chinese -- to find a way to invest in potash assets. With BHP Billiton (BHP) making its blockbuster hostile move for Potash (POT - Get Report), and with Vale developing potash mines as well, it's clear that big multinational mining companies are keen to diversify. A mined agricultural commodity like potash would offer a compelling way to do just that.

Uralkali, whose shares trade in London, was founded in the 1930s by the gurus who ran the Soviet Union's command econony. Its largest shareholder was once the potash oligarch Dmitry Rybolovlev, who made his billions by taking Uralkali public in 2007.

But another Russian billionaire, Suleiman Kerimov, has acquired a controlling stake in both Uralkali and Silvinit, Russia's largest potash producer, in a bid to merge the two companies in a $27 billion transaction. Russian analysts and brokers consider the deal likely to occur, though how Rio Tinto might fit into such a transaction remains unclear.

-- Written by Scott Eden in New York

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Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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