The projected timeline for first production under an accelerated Phase 2 expansion scenario of the Jansen potash mine, in Canada, remains 2029, BHP CEO Mike Henry said on Tuesday, addressing the intricate interplay between economic fundamentals, market outlook and execution strategies.

In response to a question from a Bank of America analyst, Henry said on a conference call that the recent plunge in potash prices would only significantly influence the progression of Jansen Phase 2 if the underlying drivers of the price correction prove to be enduring, or if they reflect a shift in the medium- to long-term market trajectory.

“Given what has happened in Russia and Ukraine, the views around what that means for medium- to long-term growth out of Russia and Belarus means that the market opportunity may indeed be stronger, or opening up earlier than what was originally anticipated,” he said.

First production under an accelerated Jansen Stage 2 is set for 2029, extending into early 2030, Henry affirmed.

“There is no decision yet. The [Phase 2] study continues, but we do want to position the company with the option to take an earlier sanction decision in the coming year.”

The feasibility study for Stage 2 is scheduled to be completed in the current financial year, which ends June 2024.

Henry stressed that the driving factors for triggering a brownfield expansion at the Canadian potash mine were rooted in strong economic fundamentals around capital expenditure (capex) and projected returns.

The execution of Jansen Stage 1 also has a bearing on a Stage 2 investment. Thus far, the trajectory of Stage 1's execution aligns well with plans, which reinforces the prospects for a subsequent phase. 

BHP has previously brought forward plans for first production at the $5.7-billion Jansen Stage 1 project in the latter half of 2026 – nine months earlier than originally planned for.

Stage 1 will produce 4.35-million tonnes a year of potash, increasing Canada’s total output of the key fertiliser input by nearly 22%. If Stage 2 is approved, an additional four-million tonnes a year of capacity will be added to Jansen.

The mine is creating a new growth front for the diversified mining company. Potash is one of the key commodities along with copper and nickel that BHP will be focusing growth efforts on.  

BHP would be spending about $11-billion a year over the medium term, with an increasing proportion of this – about 70% - going towards future-facing commodities, said CFO David Lamont. This includes continued spend on Jansen Stage 1 and potentially Stage 2, growth in the Chilean and Australian copper operations and nickel.