At first sight it seems an unequal contest. A mining giant worth £17bn, employing 29,000 people with operations across 25 countries, BHP Billiton (LSE: BLT) is one of the world’s biggest mining businesses. It produces coal, copper, iron ore, petroleum and potash and is listed on both the UK and Australian stock markets. It’s Australia’s largest company.

And now for a minnow

In contrast Sirius Minerals (LSE: SXX) is a small-cap commodities firm that’s worth only £455m. The sole product it will produce is potash for use as high-grade fertiliser, which will be taken from the North Yorkshire Moors. It’s listed not on the FTSE 100 but on the AIM small-cap index. And although it has received planning permission, it hasn’t even started to extract this mineral.

But to judge which company has the better future, let’s take a look at their past. BHP Billiton’s share price is at a third of its all time high. It has been hit hard by the fall in global commodity prices as the 17-year mining boom that started at the turn of the century has drawn to a close. Over-investment in new mining capacity has meant that this firm has had to cut costs dramatically.

And crucially, profitability has been sliding. A net profit of £8.78bn in 2014 fell to just £2.791bn in 2015. And it could fall even lower in the next few years. This has had a devastating effect on the company’s fundamentals.

BHP looks too expensive

At the current share price, the 2016 P/E ratio is predicted to be 41.28. However large this business may be, and however impressive a track record it has, it’s now a company likely to be only just profitable in the commodity bear market to come. This means that although the valuation has fallen, this firm still looks expensive.

You can expect to see more cuts in production capacity and in jobs as BHP adjusts to this new world. The downward share price trend confirms to me that this is a company to avoid.

In contrast, Sirius has the opportunity to tailor its business to what the world is now, and not what it was five years ago. It won’t over-invest in exploration and production, but it’s a business that is still clearly viable. And the polyhalite that it will mine in North Yorkshire still fetches a good price in world markets.

Yet even this company seems a bit of a punt, as the company still needs to assemble sufficient funding to be able to proceed with its mining operations, and there’s many a slip twixt cup and lip. Yet I’m hopeful that it will do so. And unlike BHP, it won’t be managing the slow decline of a company, but will be aiming to expand its business years into the future.

That’s why, given the choice between the world-renowned giant and the little-known upstart, in this case, I choose the upstart.

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Prabhat Sakya has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.