BHP stays course on Canada potash mine few expected built

Thu May 18, 2017 11:59am EDT
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By Rod Nickel

NEW YORK (Reuters) - BHP Billiton Ltd's (BHP.AX: Quote) (BLT.L: Quote) Canadian potash mine will use advanced, cost-saving technology, giving it a competitive edge in a currently over-supplied fertilizer market, the executive in charge of the business said on Thursday.

Australia-based BHP aims to start potash production at Jansen, Saskatchewan in 2023, the company said this week, eventually producing 4 million tonnes annually.

The mine is already under construction but requires BHP's board to approve another $4.7 billion to bring Jansen into production. That decision may happen as early as June 2018.

By the time Jansen opens, potash supply and demand are likely to be in balance, said Giles Hellyer, vice president of operations for potash, in a phone interview from Saskatoon, Saskatchewan.

BHP's tentative plan to proceed with Jansen shocked some analysts, who have said that the market may be oversupplied for the foreseeable future as new mines from K+S AG (SDFGn.DE: Quote) and EuroChem start up.

"We're a company which looks at large, long-life, low-cost assets," Hellyer said. "We take a long-term view."

Jansen would be the first potash mine globally to use highly efficient boring machines supported by a system to convey ore that allows the machines to run longer and at larger volumes without interruption, Hellyer said.

That system, other digital technology and minimal use of diesel equipment will raise efficiency and reduce energy costs, giving Jansen a competitive edge, he added.   Continued...

Australian mining company BHP's new corporate logo, released to Reuters from their Melbourne, Australia, headquarters May 15, 2017. BHP/Handout via REUTERS