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.”
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.
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