BHP Group is going ahead with its oft-delayed Jansen potash project in Saskatchewan.
The Australian mining giant announced Tuesday morning that it has approved $7.5 billion in capital expenditures for the project approximately 140 kilometres east of Saskatoon.
“This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations,” BHP chief executive Mike Henry said in a statement.
“In addition to its merits as a stand-alone project, Jansen also brings with it a series of high returning growth options in an attractive investment jurisdiction.”
Saskatchewan Premier Scott Moe said this is the single-largest economic investment a company has ever made in the province’s history.
“BHP’s decision highlights the strength of our potash resource and will undoubtedly help build a strong economy for Saskatchewan,” Moe said in a statement.
“We are thrilled to see this landmark potash mine move ahead. This project paves the way to create thousands of good-paying jobs for the people of this province.”
Construction is expected to take six years, with the first ore targeted for 2027.
BHP said the mine is expected to produce 4.35 million tonnes of potash yearly with the potential for future expansion.
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Henry said Jansen is located in the world’s best potash basin and opens a new front for the company to grow.
He predicted operations at the mine will last for 100 years.
“Jansen will deliver healthy returns as a high-margin, expandable resource which can support a century or more of operations,” Henry said.
“Potash provides BHP with greater diversification by commodity, country, and customer. This is a new and exciting chapter in BHP’s history.”
Economic spinoffs
BHP said the project will create 3,500 jobs at its peak construction and 600 jobs in ongoing operations.
The company said its workforce will be gender-balanced and Indigenous employees will make up 20 per cent of the labor force.
BHP said there will be economic opportunities for local and Indigenous companies.
It has signed opportunity agreements with six First Nations around the Jansen site.
Energy and Resources Minister Bronwyn Eyre said the news of the project shows the investment climate is strong in Saskatchewan.
“The positive economic impact of this decision for our province cannot be overstated,” she said.
“The Jansen Mine will generate tens of billions of dollars in taxes and royalties and create thousands of quality jobs for the people of Saskatchewan.”
BHP also said it has signed a deal with Westshore Terminals in Delta, B.C., to handle the potash that will be shipped to export markets.
Failed PotashCorp bid
The news of the investment comes almost 11 years to the day BHP launched a $39-billion hostile takeover bid for Potash Corp. of Saskatchewan.
BHP launched its failed all-cash offering for PotashCorp shares on Aug. 18, 2010.
The move was opposed by then-Saskatchewan premier Brad Wall, who said it did not provide a net benefit to the province.
The takeover bid was later blocked by the federal government, which also found there would not be a net benefit to Canada.
BHP officially rescinded its bid on Nov. 15, 2010.
PotashCorp later merged with Agrium on Jan. 1, 2018, to create new Saskatoon-based company, Nutrien.
—With files from The Canadian Press