{"id":1144426,"date":"2019-10-17T06:11:57","date_gmt":"2019-10-17T11:11:57","guid":{"rendered":"https:\/\/www.mining.com\/?p=1004586"},"modified":"2019-10-17T06:11:57","modified_gmt":"2019-10-17T11:11:57","slug":"bhp-to-decide-fate-of-jansen-potash-mine-in-early-2021","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1144426","title":{"rendered":"BHP to decide fate of Jansen potash mine in early 2021"},"content":{"rendered":"<p>BHP (ASX, NYSE: BHP), the world\u2019s largest miner, will decide<br \/>\nwhether to go ahead with its long-delayed $17 billion Jansen potash project in<br \/>\nCanada by February 2021, when it reaches 10 years since completing the feasibility<br \/>\nstudy for the operation.<\/p>\n<div class='d-flex justify-content-center'>\n<div id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {googletag.display('div-gpt-ad-1561499308230-0');});<\/script><\/div>\n<\/div>\n<p>The company has been <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.mining.com\/bhp-likely-to-open-jansen-potash-mine-in-canada-by-2023\/\" >mulling a final decision<\/a> on the asset for at least six years, during which it has spent almost $3 billion laying the ground for crop nutrient-producing project.<\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>BHP has long been eager to enter the potash market to diversify its asset base, currently concentrated around iron ore and copper.<\/p>\n<\/blockquote>\n<\/figure>\n<p>Two shafts have already been sunk, but BHP will have to<br \/>\ninvest another $5.3\u2013$5.7 billion to finish phase one construction of the mine,<br \/>\nwhich the company said would take fewer than 5 years to complete. BHP has in<br \/>\nthe past said it would consider selling a stake in the project to share capital<br \/>\nand risk.<\/p>\n<p>Jansen, located in the province of Saskatchewan, is expected to give the company exposure to rising global food demand and represents one of its <a href=\"https:\/\/www.mining.com\/bhp-grow-potash-business-size-iron-ore-report\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">few big growth prospects<\/a>.<\/p>\n<p>\u201cWork on engineering to support project planning and on finalizing the port solution is required and the board has approved $144m for these activities,\u201d BHP <a href=\"https:\/\/www.bhp.com\/-\/media\/documents\/media\/reports-and-presentations\/2019\/191017_bhpoperationalreviewforthequarterended30september2019.pdf?la=en\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">said on Thursday<\/a>. <\/p>\n<p>\u201cAn additional $201m of funding was approved to further<br \/>\nde-risk the project, focusing on the mine&#8217;s scope of work,\u201d it added.<\/p>\n<p>Chief executive Andrew Mackenzie has <a href=\"https:\/\/mining.com\/bhp-likely-to-open-jansen-potash-mine-in-canada-by-2023\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">repeatedly said<\/a> that a phased expansion of Jansen \u2014 which is projected to produce generate 8 million tonnes of potash a year or nearly 15% of the world&#8217;s total \u2014 is expected to generate competitive returns in phase one, with significant potential upside in subsequent stages.<\/p>\n<h2><strong>Great expectations<\/strong><\/h2>\n<p>BHP says it can produce potash for around $100 a tonne at<br \/>\nthe mine. In September, potassium chloride (muriate of potash) spot price was<br \/>\nat $266.5 a tonne. That compares to around $400 a tonne when Jansen was first<br \/>\nconceived and record highs more than a decade ago of $870 per tonne.<\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>Some investors have expressed doubts around Jansen,\u00a0questioning the logic of adding more supply\u00a0to an already saturated fertilizer market.\u00a0<\/p>\n<\/blockquote>\n<\/figure>\n<p>The miner expects prices to be much higher by the time supply from Jansen enters the market, sometime after 2025.\u00a0<\/p>\n<p>Earlier this year, Mackenzie acknowledged <a href=\"https:\/\/www.mining.com\/bhp-says-jansen-potash-mine-remains-attractive-option\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">it had \u201coverinvested\u201d in the project<\/a>, but noted it remained a very attractive option for the company.<\/p>\n<p>Some of its shareholders, however, have expressed their doubts about Jansen, <a href=\"https:\/\/www.mining.com\/mosaic-joins-chorus-calling-bhps-jansen-potash-mine-plan-unwise\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">questioning the logic of adding more supply<\/a> to an already saturated fertilizer market.&nbsp;<\/p>\n<p>The deposit can accommodate another three phases \u2014 at a cost<br \/>\nof $4 billion each \u2014 that would lift annual capacity to more than 16 million<br \/>\ntonnes per year, vastly improving the economics of the project.<\/p>\n<p>BHP has long been eager to enter the potash market in Saskatchewan, diversifying its asset base, which is now concentrated around iron ore and copper, since <a href=\"https:\/\/www.mining.com\/bhp-exit-shale-within-two-years-sell-nickel-assets\/\"  rel=\"noreferrer noopener\" aria-label=\"disposing of its US oil assets (opens in a new tab)\">disposing of its US oil assets<\/a>. <\/p>\n<p>In 2010, Canada blocked BHP\u2019s $40 billion hostile takeover bid for Potash Corp. (now Nutrien after a merger with Agrium) arguing the company\u2019s mines are strategic national assets. <\/p>\n<div class=\"wp-block-image\">\n<figure class=\"alignleft\"><img decoding=\"async\" src=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/10\/bhp-potash.jpg\" alt=\"BHP to decide fate of Jansen potash mine in early 2021\" class=\"wp-image-1004588\" srcset=\"https:\/\/www.mining.com\/wp-content\/uploads\/2019\/10\/bhp-potash.jpg 900w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/10\/bhp-potash-300x169.jpg 300w, https:\/\/www.mining.com\/wp-content\/uploads\/2019\/10\/bhp-potash-768x432.jpg 768w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><figcaption>BHP believes demand for potash could double by the late 2040s, by which point it could be a $50 billion market. (<em>Image courtesy of <a href=\"http:\/\/www.bhp.com\/media-and-insights\/prospects\/2017\/07\/feeding-the-world-the-case-for-potash\"  rel=\"noopener noreferrer\"> BHP.<\/a><\/em>)<\/figcaption><\/figure>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Investors have been awaiting a board decision on whether to go ahead with the $17 billion project for years.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[2849,949,369,4,2640],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1144426"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1144426"}],"version-history":[{"count":2,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1144426\/revisions"}],"predecessor-version":[{"id":1144530,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1144426\/revisions\/1144530"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1144426"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1144426"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1144426"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}