Last year, while fertilizer companies like PotashCorp (NYSE:POT) and Intrepid Potash (NYSE:IPI) were busily cutting production in the face of a sudden supply glut, we saw one mining giant pushing into potash despite the headwinds. The company was BHP Billiton (NYSE:BHP), and its object of affection was the Jansen project in Saskatchewan.

Jansen, which would mark BHP's entry into potash production, is still in the pre-feasibility stage. As with any new mine, the company will need to conduct a full feasibility study before it makes any investment decision. Nevertheless, the company has approved $240 million in capital expenditures for early development work. While that's a small fraction of the ultimate multibillion-dollar price tag, the approval still suggests a strong commitment on BHP's part.

Based on BHP's comments today, Jansen is just the beginning.

A company rep described the project -- at 8 million metric tons per annum, potentially the largest potash mine in the world -- as "the first phase" of BHP's presence in the potash sector. From its base at Jansen, it would be natural for the company to stretch out into its neighboring Boulder and Young projects. Investors should also expect BHP to eye advanced-stage projects, or even current operating mines. Agrium (NYSE:AGU) has a $3.5 billion greenfield potash project that could bring its first production in 2015. Should the company get bogged down with its attempted takeover of CF Industries (NYSE:CF), I could see BHP happily taking this project off Agrium's hands.

Of course, there's also persistent talk that BHP could/should/might possibly swallow PotashCorp whole. I view that as only slightly more plausible than last year's rumor of Vale (NYSE:VALE) preparing to take out Mosaic (NYSE:MOS).

For me, the biggest takeaway from all this is that, despite hand-wringing over the inventory glut and the new Chinese contract (both of which Mosaic says are no biggies), potash has a bright future. In the summer of 2008, the peak of Potashapalooza, this area was getting faddish. BHP's apparent belief that potash is still worth pursuing should be reassuring for all investors in this space.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.