Jansen Potash Project Stage 2 : BHP confirms $4.9bn investment to enhance potash production

In a decisive move to bolster its role in the global potash industry, BHP has approved a substantial US$4.9 billion (C$6.4 billion) investment for the second stage of its Jansen potash project (Jansen Potash Project Stage 2) in Saskatchewan, Canada. This follows the previous US$5.7 billion (C$7.5 billion) allocated for Jansen Stage 1 in August 2021 and an initial investment of US$4.5 billion (C$4.9 billion).

Strategic Expansion in Potash Market

BHP Chief Executive Officer Mike Henry, commenting on Jansen Potash Project Stage 2, emphasized the investment’s significance: “This is an important milestone that underscores our confidence in potash and marks the next phase of the company’s growth in Canada. We believe Jansen will deliver long-term value for shareholders and the local community, and will position BHP as one of the leaders in the global potash industry.”

The investment in Jansen Potash Project Stage 2 underlines BHP’s strategy to tap into the global megatrends of population growth, urbanization, rising living standards, and decarbonization. Potash, crucial for fertilizers, plays a vital role in supporting food security and sustainable agriculture.

BHP to Enhance Potash Production with $4.9bn Investment in Jansen Potash Project Stage 2. Photo courtesy of BHP.

Advancements and Projections for Jansen Potash Project Stage 2

Currently, Jansen Stage 1 is 32% complete, with the first production scheduled for late CY2026. The construction of Stage 2, expected to take around six years, aims to begin its production phase in FY2029. This additional stage will effectively double the mine’s capacity to about 8.5 million tonnes per annum (Mtpa), transforming it into one of the world’s most significant potash mines.

Jansen Potash Project Stage 2 includes constructing additional mining districts, expanding processing facilities, and increasing railcar numbers. BHP has also focused on sustainability, aiming for 50% lower greenhouse gas emissions per product tonne and up to 60% reduced fresh water usage compared to average Saskatchewan potash mines.

Long-Term Outlook and Financial Perspectives

Jansen’s growth prospects don’t end here. Long-term plans suggest potential expansions to achieve an ultimate capacity of 16 to 17 Mtpa. BHP’s investment in Jansen Potash Project Stage 2, guided by its Capital Allocation Framework, promises an internal rate of return of 15% to 18%, with an expected payback period of around six years from the start of production. This project, apart from its economic benefits, is also set to contribute significantly to the local community and indigenous representation in the workforce.