This article first appeared on GuruFocus.

BHP Group (NYSE:BHP) is positioning for a potentially tighter global potash market over the next decade, as steady demand growth could begin to run ahead of limited new supply and ongoing geopolitical disruptions. The company expects demand for the crop nutrient to rise around 2% to 3% annually, while supply additions remain constrained outside of its Jansen project, a dynamic that could contribute to a broader fertilizer supply shock already influenced by conflict in the Middle East. Karina Gistelinck, BHP's head of potash, indicated the market could move into deficit by 2035, noting that pressure on the supply side is expected to build over time.

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The Jansen project in Saskatchewan is central to that outlook, with production scheduled to begin in mid-2027 and ramp up to 4.1 million tons of annual capacity within two years. A second phase could expand output to about 8.5 million tons early next decade, potentially establishing Jansen as a significant new supply source in an otherwise tight market. Gistelinck is currently in Brazil working to convert preliminary commercial agreements into binding contracts ahead of the project's startup, suggesting BHP is moving early to secure demand before volumes come online.

Brazil is expected to be a key destination, given it represents roughly 20% of global potash demand and imports nearly all of its supply, while Southeast Asia, China, India, and the US are also being targeted as major markets. At the same time, BHP acknowledged it has learned a very expensive lesson after costs for Jansen's first phase rose to $8.4 billion, exceeding earlier estimates. Despite that, the company continues to frame potash as a long-term strategic pillar, with Gistelinck describing it as the iron ore of the future, pointing to its potential to evolve into a major earnings driver over time.