BHP approves investment in Jansen Stage 1 potash project

BHP has yesterday approved US$5.7 billion (C$7.5 billion) in capital expenditure for the Jansen Stage 1 (Jansen S1) potash project in the province of Saskatchewan, Canada.

BHP Chief Executive Officer, Mike Henry, said Jansen is aligned with BHP’s strategy of growing our exposure to future facing commodities in world class assets, which are large, low cost and expandable.

“This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations,” Mr Henry said. Jansen is located in the world’s best potash basin and is expected to operate up to 100 years. Potash provides BHP with increased leverage to key global mega-trends, including rising population, changing diets, decarbonisation and improving environmental stewardship.

Jansen S1 is expected to produce approximately 4.35 million tonnes of potash per annum, and has a basin position with the potential for further expansions (subject to studies and approvals). First ore is targeted in the 2027 calendar year, with construction expected to take approximately six years, followed by a ramp up period of two years.

Jansen S1 includes the design, engineering and construction of an underground potash mine and surface infrastructure including a processing facility, a product storage building, and a continuous automated rail loading system. Jansen S1 product will be shipped to export markets through Westshore, in Delta, British Columbia and the project includes funding for the required port infrastructure.

Mr Henry said, “Jansen will create at least 3,500 jobs during peak construction and 600 in operation. Jansen S1 will have a gender balanced workforce and approximately 20 per cent of local First Nations employees. In construction and in ongoing operations we will continue to enable local and indigenous businesses.”

The Jansen S1 project will convert approximately 20% of the 5.23 billion tonnes Measured and

Indicated Mineral Resources into Ore Reserve.

The US$2.97 billion current scope of work for Jansen is part of approximately US$4.5 billion that has been invested on the project since 2008 ahead of the sanction decision on Jansen Stage 1. Approximately US$220 million of the US$2.97 billion approved for the current scope of work, expected to be completed in the 2022 calendar year, is not yet spent. Sustaining capital for Jansen Stage 1 is expected to be approximately US$15/t (real) long term average +/- 20% in any given year.

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