PERTH (miningweekly.com) – Diversified giant BHP Billiton on Tuesday approved a $2.6-billion capital spend on its Jansen potash project, in Canada, to finish the excavation and lining of the production and service shafts, as well as the installation of essential surface infrastructure.
The miner said that the investment would be spread over a number of years, with completion of both shafts expected during the 2016 calendar year, while the associated works programme would extend to 2017.
“Annual investment at Jansen of around $800-million will form an important part of the group’s capital and exploration budget, which will decline to around $16-billion this year,” said CEO Andrew Mackenzie.
He noted that the continued development of the shafts reflected BHP’s confidence in the quality of the 5.3-billion-tonne measured resource, and the long-term fundamentals of the potash industry.
“Investment at Jansen is creating a valuable asset and we will continue to pursue a development path that maximizes returns for shareholders. In time, this may include the introduction of one or more partners, consistent with our approach for other major operations,” Mackenzie said.
The miner was hesitant to give a first production date for the Jansen project, with Mackenzie telling journalists on a conference call that the production date would be determined by market demand and BHP’s ability to fund the remaining capital investment.
“The whole basis of the Jansen strategy is that we want to retain complete flexibility to enter the market at a time when we think it's right, in order to maximise return for shareholders. By completing the construction of the shafts and some associated work, we would probably be three years away from potash, but this will be driven by how we view the market and our ability to fund further phases.”
BHP is the sole owner of the Jansen project, and the latest capital approval has taken the company’s total spend on the project to some $3.8-billion to date.