BHP Updates Major Canadian Potash-Mining Project Timeline

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Researched by Industrial Info Resources (Sugar Land, Texas)--BHP Group Limited (Melbourne, Australia) said Tuesday it increased the fiscal 2023 capital-spending guidance for its C$7.5 billion (US$5.7 billion) Jansen Phase 1 grassroot potash-mining project in Saskatchewan, Alberta (Stage 1), which is under construction, "partly due to an accelerated production schedule."

The company said there is no change to the project's total capital expenditure budget.

BHP provided the update as part of its fiscal first-half 2022 earnings release. The company said it has decided to move up the target date for first production, from 2027 to the end of the 2026 calendar year. The first phase is expected to produce between 4.3 million and 4.5 million tons of potash per year.

"Expected Jansen Stage 1 capital expenditure for the 2023 financial year has increased to approximately US$860 million, from approximately US$740 million," the company said. "Work in the 2023 financial year will continue to focus on civil and mechanical construction on the surface and underground, as well as equipment procurement and port construction."

"In addition, we have accelerated the feasibility study for Jansen Stage 2, to be completed during the 2024 financial year, a year earlier than previously expected."

The company said the first phase is now 16% complete; BHP completed the construction of two shafts and associated infrastructure in June. The project faced major delays in 2020 due to market conditions and complications stemming from the COVID-19 pandemic.

Industrial Info has tracked the project since 2006, and last year, BHP approved the project's total capital investment. Jansen Stage 1 includes 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. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a detailed project report.

The potash will be shipped to export markets through Westshore Terminals Limited's Roberts Bank Terminal, in Delta, British Columbia. Westshore Terminals, with BHP and a Canadian unit of engineering, procurement and construction (EPC) company Jacobs Solutions Incorporated (NYSE:J) (Dallas, Texas), expect the construction of a brownfield potash export facility at the terminal to kick off in April. The project involves constructing an export facility that would handle 4.5 million tons per year and modifying site infrastructure at the existing site, to receive and store potash shipments by rail from the grassroot mine. Subscribers can click here for a detailed project report.

In late January, the Canadian government announced C$100 million (US$73.9 million) in funding for the Jansen Stage 1 project, saying: "This support will lead to the production of critical minerals that will support transformation and growth across the Canadian economy, while enabling BHP to transform its own operations, reduce greenhouse gas emissions and prepare for a net-zero future." The government expects the project's initial production capacity will increase the country's potash production by nearly 22%.

The project funding is in line with Canada's efforts to promote domestic extraction and production of critical minerals. For more information, see April 13, 2022, article - Canadian Government to Support Mining of Critical Minerals.

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