BHP inks tentative sales deals for Canadian potash

4th March 2024

By: Reuters


Font size: - +

WINNIPEG - BHP has signed non-binding sales agreements for all potash production from both phases of the Canadian mine it is building, and will look to convert those into firm offtakes within 12 to 18 months, a senior executive told Reuters.

BHP Chief Commercial Officer Ragnar Udd also said the company is not interested in acquiring the idled Cobre Panama copper mine from First Quantum Minerals.

Australia-based BHP's entry into selling potash is expected to shake up the global fertilizer market, which producers in Canada, Belarus and Russia dominate. Fertilizer is a key input for farmers to boost yields of crops such as corn.

BHP expects to begin production at Jansen, Saskatchewan in late 2026, ramping up to 4.35-million metric tons annually. A second phase approved by BHP will boost yearly output to 8.5-million tons, expanding global supply by roughly 10%.

BHP plans to sell potash to distributors, rather than directly to companies that re-sell the fertilizer to farmers, Udd said, declining to name the companies.

BHP has not previously disclosed the sales agreements or how it will market its potash.

Selling to distributors reflects the fact that BHP does not own a potash distribution network and allows it to focus on what it is best at - production, Udd said in an interview.

"A lot of the feedback we've had from customers is how thrilled they are to be seeing a new reliable, stable form of supply coming in from an industry player that's well-known," Udd said.

BHP will turn tentative sales into binding contracts - typically lasting one year - as production comes online, with the first likely in late 2025 or early 2026, Udd said.

BHP will provide stiff competition to Nutrien, Mosaic, Belaruskali and Uralkali. The company's entry may initially be "quite destructive" to prices, said Humphrey Knight, principal analyst of potash and phosphates at consultancy CRU.

Selling to distributors runs counter to how BHP usually operates, controlling much of the supply chain itself, Knight said.

The US is the prime market for Canadian potash due to its proximity, but it has been difficult to penetrate for another producer, Germany's K+S AG SDFGn.DE, Knight said.

Udd said he would not give specifics about BHP's US plan but said it is "quite comfortable" with its ability to compete there.

BHP, best-known for mining iron ore, copper, nickel and metallurgical coal, is not interested in acquiring First Quantum's Cobre Panama, one of the world's largest open-pit copper mines, which was forced to shut down in December after Panama's top court ruled that its contract was unconstitutional.

"Honestly, while we're always looking for opportunities, I think that's a situation best left for Panama and others," Udd said.

Edited by Reuters




SMS group
SMS group

At SMS group, we have made it our mission to create a carbon-neutral and sustainable metals industry.

John Thompson
John Thompson

John Thompson, the leader in energy and environmental solutions through value engineering and innovation, provides the following: design, engineer,...


Latest Multimedia

sponsored by

Magazine round up | 12 April 2024
Magazine round up | 12 April 2024
12th April 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.144 0.178s - 149pq - 2rq
1: United States
Subscribe Now
2: United States