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The worlds biggest miner will be able to brandish its firepower for Potashs bid on Wednesday when it is expected to report a 50 percent jump in June-half profit to $6.9 billion on a big rebound in iron ore, copper and coal prices.

Clearly, its going to be a very good result....The balance sheet is in excellent shape and the cash flow will be significant, said James Bruce, a portfolio manager at Perpetual Investments, which owns BHP shares.

While the result is expected to be impressive, shareholders nervous about BHPs attempt to buy the worlds biggest fertilizer company want to hear more on why it wants to make a pricey acquisition in a new business for the group.

They still want to be persuaded that it makes more sense than using its cash pile to buy back shares and boost earnings per share instantly.

When youre paying $40 billion cash, at a minimum -- theyll have to up that -- theres not a lot of room for error if it doesnt quite go your way, said Peter Chilton, an analyst at Constellation Capital Management, another BHP shareholder.

No one expects a deal to go ahead at $130 a share, and a Reuters poll of 11 global shareholders in Potash indicated an offer 25 percent higher at around $162 a share could win support for a takeover.

Rival Rio Tinto is weighing a bid with a Chinese partner for Potash, a Canadian newspaper said on Tuesday. Citing unnamed sources, Canadas Globe & Mail web site said Rio Tinto is said to be considering a bid alongside a Chinese player as relations between the two sides strengthen.

BHPs low gearing and massive cash flows are key factors that have allowed it to line up $45 billion in debt funding for its bid, and analysts see those cash flows improving in the year ahead to as much as $40 billion.

BHP Billiton Chief Executive Marius Kloppers bragged about the groups strength a week ago after the groups approach Potash Corp was outed.

If I look at our EBITDA and cashflow figures,...youll see that this is a company that creates a prodigious cash flow, even against the backdrop of investments that we are already making, he told reporters on August 18.

Once the groups results are out of the way, Kloppers and his team will be free to begin their charm offensive with Potash Corp shareholders.

COUNTERBIDDERS SCARCE

On Monday, Potash talked up the chances of lining up a white knight or a counterbidder, but some potential rivals have already virtually ruled themselves out.

Potash Chief Executive Bill Doyle, who stands to earn a half-billion dollars from a deal, said the company was considering all its options including joint ventures and levering up the companys balance sheet.

He did not name a value that would be acceptable for the company, but said it should be a hell of a lot more than the price on the table.

On Monday, Brazils Vale denied talk it was lining up a bid.

Aluminum Corp of China Ltd Chalco, which is looking to diversify, said on Tuesday it was targeting coal and rare earth businesses, but sidestepped speculation it might be eyeing potash.

Chalcos investment should meet our investment criteria. We are not interested in just everything, Chairman Xiong Weiping told reporters.

Last week, Rio Tinto Chief Executive Tom Albanese declined to comment specifically on Potash, but when asked whether his company had any interest in agriculture, he said: Im not a farmer. Im a miner.

Rio Tinto sold off its potash assets to help pay down a mountain of debt two years ago, but Albanese did call potash a pretty interesting mineral.

Editing by Anshuman Daga