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.
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
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