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CALGARY - A small Calgary potash explorer is being taken over by BHP Billiton as the world's biggest miner tries to cash in on soaring demand for fertilizer in global agricultural markets.

Anglo Potash Ltd. (TSXV:AGP) announced Monday it has agreed to be taken over by its partner BHP Billiton Diamonds Inc. in a deal that values the Saskatchewan-focused exploration and development company at $284 million.

BHP Diamonds is the Canadian unit of BHP Billiton (NYSE:BHP), the Anglo-Australian mining giant that produces copper, zinc, coal, aluminum, iron ore and other minerals from mines around the world.

In Canada, the company is a major diamond producer, operating the Ekati mine in the Far North in which BHP owns 80 per cent.

BHP already holds about three per cent of Anglo Potash, a company whose only asset is a 25 per cent stake in a potash joint venture development project in which BHP Billiton has a 75 per cent stake.

If Monday's transaction is approved, the acquisition will give the global company 100 per cent control of the promising joint venture.

"Our Canadian potash position comprises a world class development with over 7,338 square kilometres of highly prospective exploration permits in the immediate vicinity of existing major Saskatchewan potash mines," said BHP Diamonds president Graham Kerr.

"Today's announcement is consistent with BHP Billiton's strategy of capturing and developing premium growth options in long-life, low cost natural resources with a focus on delivering shareholder and stakeholder value."

The price in Monday's agreement is $8.15 per share in cash, a 34 per cent premium on Friday's closing price of $6.07, which was up from less than $2 a year ago.

Anglo Potash's board has unanimously approved the acquisition, which is expected to close in July and carries a $10-million break fee if an outside bid prevails.

CEO Todd Montgomery and other insiders holding a total of 26 per cent of Anglo Potash's stock have entered into lockup agreements with Melbourne, Australia-headquartered BHP Billiton, the world's biggest diversified resource company with 39,000 employees in two dozen countries and annual sales of US$47.5 billion.

"We are pleased to take this step with BHP Billiton and believe the acquisition will benefit the shareholders of Anglo Potash," Montgomery stated in a release.

"We have been joint venture partners with BHP Billiton for two years of exploration and development, the success of which is underscored by today's excellent offer from BHP Billiton."

The joint venture, operated by BHP Billiton, holds 32 potash permits covering almost 7,300 square kilometres in Saskatchewan.

The prairie province is Canada's biggest fertilizer producing zone, with major companies such as PotashCorp. (TSX:POT) and Mosaic with mines and exploration projects there.

Demand has been soaring for potash, a mineral used to make fertilizer and cement, mainly because of sharply higher global demand from farmers trying to increase crop yields and production to feed an increasingly hungry world.

In trading on the TSX Venture Exchange on Monday, Anglo Potash stock rose $1.99 to $8.06, a gain of 32.8 per cent. About 5.6 million shares were traded, more than 50 times the average daily volume for the junior company.

Other junior potash explorers also rose on the news, including Saskatoon-based Athabasca Potash, which jumped $1.33 to $8.83, a gain of 17.7 per cent.

Meanwhile, Vancouver-based Potash One rose 36 cents to close at $3.55, a gain of more than 11 per cent, while Western Potash, a company also based in Vancouver, rose five cents to $1.05.