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BHP goes for it: $2.6 billion in Canada’s Jansen potash project

by Cecilia Jamasmie | August 20, 2013 | Reprinted by permission of Mining.com

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.

Jansen potash project

BHP Billiton CEO
Andrew Mackenzie

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.

“Investment at Jansen is creating a valuable asset and we will continue to pursue a development path that maximizes returns for shareholders,” BHP CEO Andrew Mackenzie said in a statement.

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

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