BHP Billiton NYE:BHP showed Tuesday its commitment to develop Canada’s Jansen Potash project, potentially one of the world’s largest mines for the fertilizer ingredient, by announcing an investment of US$2.6 billion over the next four years.
The world’s No. 1 mining company said the sum will go towards building shafts and surface infrastructure at the Saskatchewan-based mega project.
Today’s announcement lets BHP move Jansen forward without having to make an imminent production decision amid uncertainty over the potash market after Russian producer Uralkali ended a cartel arrangement in July that had kept prices high.
The decision also marks the end of a freeze in spending on major new projects in light of falling commodity prices. Last year the company ditched nearly $40 billion in projects and closed some of its struggling coal mines.
In 2010 the government of Saskatchewan opposed BHP’s attempted takeover of Potash Corporation of Saskatchewan TSX:POT and the federal government eventually blocked the deal. But BHP vowed to keep moving its 100%-owned Jansen forward.
Called by Mackenzie “the world’s best undeveloped potash resource,” the mine is expected to produce 10 million tonnes of potash a year for at least 50 years.
Reprinted by permission of Mining.com