BHP sets 2021 timeline for Jansen, Sask. potash mine investment decision

WATCH ABOVE: BHP hopes to make final decision on its Jansen potash mine in early 2021.

Australian mining giant BHP Group Ltd. says it hopes to make a final investment decision on a massive potash project in Saskatchewan in early 2021.

In its latest quarterly report, the company said its board of directors will be asked to decide the fate of the long-delayed Jansen project about 140 kilometres east of Saskatoon in February 2021.

READ MORE: BHP delays decision on Jansen potash mine

An Odlum Brown Ltd. equity analyst expects the company to stick with the project despite its cost and delays.

“It’s a dog with a bone. They just refuse to let go of the project even though if they did it years ago, it probably would’ve been a way better investment decision,” Fai Lee said.

“But now they’re in it so far I think they’re just kind of too late to almost … they keep pushing off the decision. If they don’t see demand being there in five or six years from now, I wouldn’t be surprised if they push this out again.”

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His opinion is that BHP is waiting for an optimal time to enter the market before completing the mine.

Prices for potash, a light coloured mineral used as a crop fertilizer, have plunged due to a global oversupply, leading to layoffs and mine production interruptions in Canada.

Last month, Canadian fertilizer company Nutrien Ltd. announced eight-week inventory shutdowns at three of its potash mines in Saskatchewan, potentially affecting up to 700 workers.

READ MORE: Nutrien temporarily laying off hundreds at 3 Sask. potash mines

BHP said it has approved spending $190 million on engineering and $264 million to further de-risk the Jansen project in advance of its decision.

It has invested about $3.5 billion on the first phase of the project, including sinking two shafts, and said it is about 84 per cent complete.

-With files from Kyle Benning

Hundreds of Sask. potash mine workers prepare for layoffs
Hundreds of Sask. potash mine workers prepare for layoffs