HomeIndustrial MineralsBHP's US$10 million potash project

BHP’s US$10 million potash project

The Esterhazy potash
mine in Canada
Saskatchewan, Canada — MININGREVIEW.COM — 03 June 2009 – BHP Billiton Limited – the world’s largest mining company – is considering spending US$10 billion (R90 billion) on the development of a major potash project in Canada, although it prefers purchasing producing mines.

Goldman analysts led by Neil Goodwill said in a report released here that once completed, the Jansen mine might be able to supply as much as 8 million metric tonnes annually, equivalent to about 15% of global sales.

Quoting Goodwill, Bloomberg News reports that demand for potash – used mostly in fertilizer – may increase as population growth forces the world’s farmers to grow more food more efficiently to save space. At current prices, the global potash market is worth US$28 billion (R250 billion), it said.

“Growth has been around 3% per annum, with India and China having the potential for significantly increasing this growth trend,” Goodwill continued. “We would expect BHP to look to acquire if the conditions are right in order to accelerate its potash position and reduce the marketing risk.”

“Construction of the mine may begin at Jansen in July 2011, with first production in January 2015,” BHP said in a document lodged with the Saskatchewan Ministry of Environment in November. “It may take 10 years to reach capacity,” the company added.

CEO Marius Kloppers said in February that BHP’s expansion preference in potash would be through the purchase of producing mines rather than undeveloped deposits.