BHP (ASX:BHP) has increased the value of its massive Jansen potash project to over $23.5 billion, with the approval of Stage 2 in Saskatchewan, Canada. This stage will cost approximately $4.9 billion, following BHP's previous approval of $5.7 billion for Stage 1 and a pre-Jansen Stage 1 investment of $4.5 billion in August 2021.
The latest investment will transform Jansen into one of the world's largest potash mines, doubling production capacity to around 8.5 million tonnes per year by the early next decade. Jansen Stage 1 is currently 32% complete and progressing according to schedule, with first production expected in late 2026. Construction of Jansen Stage 2 is projected to take about six years, with first production expected in the 2029 financial year, followed by a three-year ramp-up period. Stage 2 is expected to yield approximately 4.36 million tonnes of potash per year.
In October 2022, BHP allocated an initial funding commitment of $188 million for long-lead equipment procurement and the commencement of process plant foundation work. The additional $4.9 billion investment for Jansen Stage 2 will be used for the development of additional mining districts, the completion of the second shaft hoist infrastructure to handle higher mining volumes, expansion of processing facilities, and the addition of more railcars.
BHP CEO Mike Henry stated, "This is an important milestone that underscores our confidence in potash and marks the next phase of the company's growth in Canada. We believe Jansen will deliver long-term value for shareholders and the local community, positioning BHP as a leader in the global potash industry."
Westshore Terminals in Delta, British Columbia, remains BHP's primary port facility for shipping potash from Jansen to customers. The Jansen Stage 2 investment includes funding to increase storage facilities at the port. BHP stated that it will not initiate a formal capacity extension for the Westshore port terminal at this time and will evaluate it closer to Jansen Stage 2 reaching first production.
Longer-term, BHP envisions the potential for two additional expansions at Jansen, potentially reaching an ultimate production capacity of 16 to 17 million tonnes per year, subject to studies and approvals.
