Nutrien confident in potash demand even with BHP project

(File photo by Dave Bedard)

Calgary | Reuters — Canada’s largest potash producer Nutrien said Tuesday it is confident in growing global demand for the crop fertilizer, shrugging off BHP Group’s decision to press on with its massive Jansen project in Saskatchewan that will add millions of tonnes a year of potash supply.

BHP announced Tuesday it is going ahead with its Jansen potash project, which is expected to cost $7.2 billion in the first phase.

The mine will produce 4.35 million tonnes of potash per year from 2027, BHP said. Potash is a key element in plant nutrition that also makes crops more drought resistant.

Canada produced 21 million tonnes in 2019, accounting for more than 31 per cent of global supply.

“It will take another decade for Jansen to have significant production,” Ken Seitz, chief executive of Nutrien Potash said in a statement.

Nutrien expects global demand to grow by two to three per cent per year until close to 2030. The company is also seen as an ideal partner to dilute BHP’s risk and development costs. BHP says it is open to but not in need of a partner, while Nutrien has said that any tie-up with BHP is not its focus.

Global potash demand by 2030 is likely to be more than sufficient to absorb additional supply from Jansen, said Morningstar analyst Seth Goldstein, as farmers in Asia use more of the crop nutrient.

“Potash has one of the best demand outlooks of any fertilizer out there,” Goldstein said.

This month Washington imposed sanctions on Belaruskali OAO, one of Belarus’ largest state-owned enterprises and among the world’s biggest producers of potash. Belarus Potash Co. (BPC), the exporting arm of Belaruskali, warned the move would lead to global potash price increases.

Jansen is expected to create 3,500 jobs annually during construction and employ 600 permanent operating staff.

Saskatchewan Premier Scott Moe on Tuesday described the Jansen mine as the largest private economic investment in the province’s history.

— Nia Williams is a Reuters reporter in Calgary.

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