BHP (ASX, NYSE: BHP), the world\u2019s largest miner, will decide whether to go ahead with its long-delayed $17 billion Jansen potash project in Canada by mid-2021, about a decade after completing the feasibility study for the operation.<\/p>\n
The company had planned to make an investment decision in February 2021<\/a>, but delays relating to the completion of shafts have pushed out the date by a few months.<\/p>\n BHP said initial challenges with placement of shaft lining, rectified since, as well as the group\u2019s covid-19 response plan impacted Jansen\u2019s progress during the quarter ended June 30<\/a>.<\/p>\n The project is 86% completed, the mining giant said, adding it has earmarked $2.7 billion to finish excavation and lining of the production and service shafts. The figure is also expected to cover the further installation of surface infrastructure and utilities, it said.<\/p>\n The Melbourne, Australia-based miner has been mulling Jansen\u2019s fate<\/a> for at least seven years. In that period, it has spent billions laying the ground for crop nutrient-producing project.<\/p>\n The recent delays on the project will result in additional costs, BHP said, adding that an expense review was under way.<\/p>\n The forecast capital cost for the execution of stage 1, however, remained unchanged at between $5.3 billion and $5.7 billion. BHP has in the past said it would consider selling a stake in the project to share capital and risk.<\/p>\n Located in the Canadian province of Saskatchewan, 140km east of Saskatoon, the mine is expected to give BHP exposure to a market driven by rising global food demand and represents one of its few big growth prospects<\/a>.<\/p>\n Jansen is slated to produce 8 million tonnes of potash annually, or nearly 15% of the world\u2019s total over an estimated 70-year mine life.<\/p>\n Former BHP boss, Andrew Mackenzie acknowledged last year that the company had \u201coverinvested\u201d in the project<\/a>, but said it remained a very attractive option for the group.<\/p>\n \u201cJansen is a tier 1 deposit, with potential to be one of the lowest cost operations in the world,\u201d the current chief executive, Mike Henry, said on Tuesday.<\/p>\n Some of the company\u2019s shareholders, however, have expressed their doubts about Jansen. They question the logic of adding more supply<\/a> to an already saturated fertilizer market. <\/p>\n The deposit can accommodate another three phases \u2014 at a cost of $4 billion each \u2014 that would lift annual capacity to more than 16 million tonnes per year, vastly improving the economics of the project.<\/p>\n\u201cAttractive\u201d growth option<\/strong><\/h2>\n