HomeMarket NewsMiningBHP to Invest $4.9 Billion into Jansen Mine, Doubling Potash Output

BHP to Invest $4.9 Billion into Jansen Mine, Doubling Potash Output

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BHP, a global resources company, has announced plans to invest $4.9 billion in the Jansen mine to double its potash production. Potash is a vital component of crop fertilizers and is a key focus of BHP’s future growth strategy. The company predicts that potash demand will increase by 15 million tonnes to approximately 105 million tonnes by 2040, driven by population growth and the need to improve farming yields.

The additional investment in Jansen will transform it into one of the world’s largest potash mines, with a projected production capacity of around 8.5 million tonnes per year by late fiscal 2029. This investment marks a significant milestone for BHP’s growth in Canada, according to CEO Mike Henry.

BHP to inject $4.9 billion in Jansen to double potash output
Source: BHP’s presentation at BMO Farm to Market Conference 2022.

The first stage of the Jansen project is currently 32% complete and progressing according to schedule. The second stage is projected to take six years and produce approximately 4.36 million tonnes per year at a capital intensity of about $1,050 per tonne. BHP’s investment strategy focuses on large deposits with high barriers to entry and strong profit margins, and these figures align with that approach.

This investment in the fertilizer market is not the first attempt by BHP. In 2010, the company made an unsuccessful bid of $38.6 billion for Potash Corp. of Saskatchewan, which later merged with Agrium Inc. to form Nutrien (TSE, NYSE: NTR) in 2018.

The Jansen mine has the potential to produce 16-17 million tonnes of potash annually across its four-phased development, accounting for approximately 25% of the current global demand for potash.

Originally, production at Jansen was planned to begin in 2027. However, market conditions, such as Russia’s invasion of Ukraine and sanctions on Belarusian potash, have prompted BHP to bring forward stage 1 first production to 2026.


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