(Bloomberg) — BHP Group approved an accelerated expansion of its giant potash project in Canada, as fertilizer markets remain buoyed by expectation of tight supplies and as the mining giant seeks to become less dependent on polluting fossil fuels.
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The world’s biggest miner, which is entering production of the crop nutrient to add exposure to population growth, has been searching for ways to speed up the Jansen project for more than a year as the long-term outlook for fertilizer prices improves.
The company said Tuesday that it was now going ahead with its so-called stage two expansion, even before the first phase of the mine is in production. BHP, which had already committed more than $10 billion to the project, said the second stage would cost another $4.9 billion.
Fertilizer prices surged after Russia’s invasion of Ukraine as soaring natural gas prices — a crucial feedstock — raised costs. Sanctions on Belarusian potash and moves by China to rein in shipments also tightened the market. While prices have come off their highs, companies like BHP expect the market to remain tight.
BHP finally approved construction of the Jansen mine in Saskatchewan, Canada, in 2021 after years of debate over the huge price tag. Jansen could operate for a century, and eventually grow to a scale that would rival the size of the company’s flagship Pilbara iron ore operations, BHP has said.
Jansen is expected to start production in 2026, producing just over 4 million tons a year. The phase two expansion will see that double to around 8.5 million tons a year, making it one of the world’s biggest fertilizer mines.
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