BHP sets early 2021 for decision on Canada potash project
Jansen project could provide miner with another pillar of long-term growth
Toronto — BHP Group, the world’s biggest miner, will make a final investment decision on its long-delayed $17bn (R252bn) Jansen potash project in Canada around February 2021.
Investors have been awaiting a decision by BHP on whether to go ahead with the project, which it hopes will provide another pillar of long-term growth.
In its September production report, BHP said project planning and work to finalise a port solution was continuing and the $5bn-plus stage one will be presented to the board for an investment decision by February 2021.
BHP, which has already spent $2.7bn on Jansen, said in May it expects excess supply capacity of the crop nutrient to be used up by the middle of the next decade, while the Jansen project would create a “high-margin, long-life” mine.
Potash is a potassium-rich salt mainly used in fertiliser to improve the quality and yield of agricultural production.
Elsewhere, BHP posted a slight dip in its September quarter iron ore production due to planned maintenance at a key port, but maintained its fiscal 2020 iron ore production forecast.
The result was in line with analyst forecasts and came as the miner carries out ongoing maintenance at Port Hedland, the world’s biggest iron ore port, which is used by three of the country’s top-four iron ore miners.
“Lower volumes reflected planned maintenance at Port Hedland, including a major car dumper maintenance programme,” BHP said.
Output for the three months ended September 30, BHP’s first fiscal quarter, was 69-million tons, down 1% on a year ago and 3% on the June quarter. Annual output is expected at 273-million to 286-million tons.
Iron ore prices have come off five-year highs touched in July as Brazil’s Vale ramped up production that had been curtailed by a fatal dam disaster, and Australian shipments are expected to moderate into year-end.
“Overall, a solid result for BHP with all key segments broadly in line with our estimates,” Royal Bank of Canada said in a report.
“BHP’s more diverse portfolio mitigates the potential impact of falling iron ore prices ... we maintain our preference for BHP over its key Australian peer Rio.”
Quarterly copper output rose 5% on a year ago as production recovered from outages in Australia and Chile, while metallurgical coal production fell after planned maintenance shutdowns.
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