China's Zhongchuan International Mining and Taiji Resources are exploring for potash in the Saskatchewan province in Canada, as overseas investors push for an increase in agricultural nutrients.
The Saskatchewan Government awarded exploration rights to Zhongchuan in September 2008, government spokesman Bob Ellis said.
Zhongchuan's Canadian subsidiary Canada Jiuyi is drilling and carrying out seismic tests on a 96km2 site near the city of Saskatoon.
If the site is developed it could annually generate three million tonnes of potash, the Xinhua news agency said.
According to the agreement, Zhongchuan can explore for potash for up to four years and can apply for extensions.
Taiji Resources has active exploration rights in Saskatchewan, Ellis said.
Prohibitive mine-building costs have led a few potash exploration companies to seek foreign investors, or strategic players that are keen on partnering in their projects.
Juniors companies including Potash One, Athabasca Potash and Western Potash are reportedly in negotiations with Chinese and Indian companies that want to secure potash supplies to meet escalating demand for fertiliser in their countries.
China is the world's biggest buyer of potash, an essential mineral required for plant growth.