After over a decade of development and digging, one of the world’s biggest mining and metals companies has granted its Saskatchewan potash mining project the go-ahead to completion and full production.
Australian-British mining firm BHP announced Tuesday its board has approved its potash mine about 60 km southeast of Humboldt, near Jansen, Sask., for another $7.5 billion in development to completion.
At full production, the Jansen mine is expected to yield about 4.35 million tonnes of potash per year, with a position in the “world’s best potash basin” allowing for further expansion. The mine is expected to operate for up to 100 years.
First ore is expected in 2027, with full construction expected to take about six years, followed by a two-year ramp-up period, the company said in a release.
In development since 2010, Jansen lines up with BHP’s current strategy of “growing our exposure to future-facing commodities in world-class assets, which are large, low-cost and expandable,” BHP CEO Mike Henry said in the release.
Its entry into the potash business gives it “increased leverage to key global mega-trends, including rising population, changing diets, decarbonization and improving environmental stewardship,” the company said.
“This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations,” Henry said, noting the mine will be designed with a “focus on sustainability, including being designed for low GHG emissions and low water consumption.”
Getting Jansen to first-stage completion will involve design, engineering and construction for an underground potash mine and surface infrastructure including a processing plant, product storage and a “continuous automated rail loading system.”
The mine’s potash will be railed out for export via the Westshore coal terminal at Delta, B.C. as per a recently announced agreement with terminal operators. The approved funding also covers the infrastructure needed to handle potash at Westshore.
BHP’s investment until now at Jansen has run up to about $5.7 billion, including construction of the shafts and associated infrastructure — already about 93 per cent complete, the company said Tuesday — and engineering, about 50 per cent completed.
The company said Tuesday it has previously acknowledged its “significant initial outlay” at the site, adding that “our approach would be different if considering the project again today.”
“The positive economic impact of this decision for our province cannot be overstated, as the Jansen mine will generate tens of billions of dollars in taxes and royalties and create thousands of quality jobs for the people of Saskatchewan,” provincial Energy and Resources Minister Bronwyn Eyre said Tuesday in a separate release.
Operations at the company’s mine and Saskatoon corporate office will create over 600 jobs in the province, along with about 3,500 jobs at peak construction, Henry said.
As for the mine’s impact on potash fertilizer markets, BHP said it “anticipate(s) that demand growth will progressively absorb the excess capacity currently present in the industry, with opportunity for new supply expected by the late 2020s or early 2030s.”
That time period, BHP said, is “broadly aligned with the expected timing of first production from Jansen.”
Past the 2020s, BHP said, the industry’s long-run trend prices are “expected to be determined by Canadian greenfield solution mines.”
Solution mines, the company said, tend to consume more energy and water than conventional mines like Jansen, and also have “higher operating costs and higher sustaining capital requirements.”
BHP’s 2010 proposal to build the Jansen mine originally charted a more aggressive pathway into the Saskatchewan potash sector, first by buying junior miner Athabasca Potash, then by launching a takeover bid for Saskatchewan fertilizer giant PotashCorp.
Earlier this year, news reports had quoted unnamed sources as saying BHP was in discussions with Nutrien — formed by the 2018 merger of PotashCorp and fertilizer rival Agrium — about the latter firm taking a stake in the Jansen mine. Nutrien later scotched those reports as “speculative and inaccurate.” –– Glacier FarmMedia Network