REGINA – A spokesman for BHP Billiton is dismissing suggestions from Down Under that a potash megaproject in Saskatchewan could be put on the backburner.
An Australian newspaper reported that the Jansen mine could be the most likely of BHP Billiton’s (NYSE:BHP) projects to face delay or reduced investment.
The Sydney Morning Herald said CEO Marius Kloppers recently told investment bankers that spending on planned construction could slow if market conditions worsen.
BHP spokesman Chris Ryder says the Jansen project east of Saskatoon is going full steam ahead.
Ryder, who is vice-president of external affairs, says talk of a delay was pure speculation.
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“We actually made no statement around intentions,” he said. “Our CEO was simply going through some of the … characteristics of our major projects around the world and giving some insight into complexity of capital allocation.
“But there was no announcement, no change of intent with respect to Jansen. We’re driving hard towards first production from Jansen in 2015.”
The newspaper said Jansen was described as posing both the highest risk in technical terms while being “least compelling in market terms” for BHP. The story quotes unnamed analysts concluding that Jansen is probably the lowest priority of three megaprojects being undertaken by the Anglo-Australian mining giant.
“I would say on Jansen that’s not going to happen,” said Ryder “We’ve looked at some of our other businesses. For instance, we have projects in our aluminum business and in our stainless steel business that we’re not spending on anymore.”
Ryder said those were the ones Kloppers was referring to when he spoke. The Jansen project was never specifically mentioned, he added.
“You’ve got some businesses that don’t fit within our strategy as well as some of the other businesses,” he said. “Potash is perfect for our strategy. Long life, low cost and it’s expandable and export-oriented
BHP has put nearly $2 billion into the Jansen project. Final approval is expected this year. Total cost of the project is at least $12 billion.
(CJWW, CJME)
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