Sask. sees BHP potash mine proceeding, Vale plan stalls

A cabinet minister in potash-rich Saskatchewan expects major miner BHP Billiton to proceed with construction of its potash mine, and an announcement may come within days.

Bill Boyd, Saskatchewan’s minister of the economy, said Friday he does not expect BHP to delay the project as Brazil’s Vale SA did with its own Saskatchewan project on Thursday.

"We’re hearing to the contrary, actually, that they are moving ahead, that this is a project that looks very positive for them," he said on BNN TV.

"I think at some point in the very near future they’re going to be clarifying their investment decision," said Boyd, whose ministry includes responsibility for Saskatchewan’s resource portfolios. "I understand it’s probably days, not weeks away."

But a spokesman for BHP, the world’s biggest miner, said the project has not yet gone to the company’s board of directors.

"Work at Jansen continues. The shaft-sinking process is well underway and we are focused on the detailed engineering studies and mining lease conversions that we will need to complete before we take the project to the board," said BHP spokesman Ruban Yogarajah, in an e-mailed statement to Reuters.

BHP’s mine at Jansen, Sask., about 140 km east of Saskatoon, would be the world’s largest potash mine, producing eight million tonnes of the crop nutrient annually at full production.

The project is one of three mega-projects that analysts have suggested BHP is considering for delay as they await approval by BHP’s board of directors.

The chief executive of BHP rival Vale SA, Murilo Ferreira, said Thursday that the company is reconsidering its Kronau potash project southeast of Regina. Vale’s project requires an investment of $3 billion in its initial phase.

"The project will not be implemented now," Ferreira told journalists in Rio de Janeiro.

Germany’s K+S AG broke ground in June on its own potash mine in Saskatchewan, where PotashCorp, Agrium and Mosaic Co. also mine potash. Canada accounts for more than 40 per cent of global potash reserves.

— Rod Nickel writes for Reuters from Winnipeg.

Related stories:
German fertilizer firm pledges new Sask. potash mine, Nov. 30, 2011
Rio Tinto buys into Sask. potash play, Sept. 27, 2011
Billiton potash project gets Sask. environmental approval, July 1, 2011
Potash "oligopoly" may crack in longer term: analyst, Jan. 4, 2010



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