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* H2 profit down 15 pct to $6.12 bln, misses forecasts
* Final dividend 59 cents v 60 cents consensus
* To invest $2.6 bln to progress Jansen potash project
* BHP says aims to sell stakes in Jansen
By Sonali Paul and Clara Ferreira-Marques
MELBOURNE/LONDON, Aug 20 (Reuters) - Miner BHP Billiton mapped out a cautious approach to expanding into potash on Tuesday, keeping a $14 billion Canadian project alive but delaying production at the giant deposit until at least 2020.
In its first set of results under new Chief Executive Andrew Mackenzie, BHP outlined its plan to keep options open alongside a 15 percent drop in half-year profit. The world's largest miner missed forecasts largely due to Australian mining tax adjustments and other non-operational items.
BHP and Glencore Xstrata wrapped up the results season for the world's big five miners, with BHP holding up slightly better than its peers as it stepped up output of iron ore, copper, coal and oil and slashed $2.7 billion in costs in the face of sliding commodity prices.
Major miners have come under pressure to rein in spending, sell off underperforming assets and tackle debt after years of rampant spending on new mines and acquisitions as prices rose.
Reflecting the sector-wide austerity drive, BHP said it plans to invest $2.6 billion over the next four years digging shafts at the Jansen potash project in Canada to keep its options open, delaying production by at least five years while inviting offers for stakes in the mine.
Mackenzie said he wanted to retain flexibility to enter the market a time that was right for shareholders.
"We are very confident the market is going to need a new greenfield mine sometime in the next decade, but the exact timing is not clear," Mackenzie told reporters.
Spending on Jansen currently accounts for just 5 percent of BHP's capital budget, Mackenzie said, but a forecast drop in prices for the fertiliser ingredient had raised questions over the future of the mine, the last of BHP's three mega-projects.
BHP put more than $40 billion worth of projects on ice a year ago to combat costs that had grown out of control over the previous decade as miners raced to feed booming Chinese demand.
Mackenzie, though, outlined a more aggressive cut in capital and exploration spending than recently flagged, with spending to fall 26 percent to $16.2 billion in the 2014 financial year.
BHP has also sold $6.5 billion of assets over the year, as majors slim down, but said it would not accelerate that drive.
"Our cash flows are strengthening, debt levels are down and the need to raise money in other ways is waning," he said, warning he would not sell assets cheaply.
BHP's London shares were down 1.7 percent at 1330 GMT, retracing earlier losses but still underperforming a 1.3 percent drop in the broader UK-listed mining sector, as the profit miss and the decision to keep Jansen weighed.
"They are in a corner," analyst Des Kilalea at RBC Capital Markets said, adding an exit from Jansen would have meant an effective end to BHP's efforts to enter the potash market - one the miner believes could flourish as developing countries look to grow more food over the next few decades.
"There is no absolute commitment here to build it - it is just a commitment to keep working on it, to keep an iron in the fire," he said.
BHP has long planned to break into the potash industry.
It has already invested $1.2 billion in Jansen and the timing of its entry has been closely watched by the world's major producers, led by Potash Corp of Saskatchewan, which BHP tried to take over in 2010.
Its $39 billion bid was blocked by Canada on fears that potash prices and royalties would drop as BHP planned to split from the North American cartel. Now Russia's Uralkali has given potash producers a taste of what could happen as it recently quit the Belarusian Potash Co cartel.
Mackenzie said once Jansen's shafts and infrastructure are in place, the mine would be about three years away from production, but the company would decide on when to begin producing based on the market and its ability to fund further development.
BHP, which has now pushed production back until at least 2020 from its original 2015 target, believes the project will generate returns well above the company's average over decades.
"As long as we get the timing right, we're not overly aggressive, we think those returns are there," Mackenzie said.
BHP's attributable profit excluding one-offs fell to $6.12 billion for the six months to June from $7.18 billion a year ago. That was well below analysts' forecasts of $7.16 billion.
BHP increased its final dividend by 2 cents to 59 cents.