BHP Billiton says it has been encouraged by recent work that suggests its push into the Canadian potash sector will be supported by further resources of the commodity close to its proposed Jansen mine.
BHP confirmed a gradual push into the potash sector in August, when it approved $US2.6 billion worth of spending on Jansen over five years, and since then the miner has described potash as having the potential to become a ”pillar” of the company alongside iron ore, coal, petroleum and copper.
Speaking at the company’s annual meeting in Perth on Thursday, BHP Billiton boss Andrew Mackenzie said exploration work had suggested that Jansen could be just the start of a ”basin-wide play” for BHP in the Canadian state of Saskatchewan.
”On its own Jansen is probably not a big enough resource for us to be a business that would rival our other four pillars, we need several Jansens,” he said,
”The news is good, we feel very confident that we now have many more Jansens that future generations of management can consider to think about this as a basin-wide play.”
Mr Mackenzie said the pace of investment in the basin would continue to be gradual, but he said it was ”very exciting”.
The company believes demand for potash – which is used in fertiliser – will likely grow at up to 3 per cent per year over the next 17 years.
The AGM was otherwise dominated by commentary about climate change policy, with Mr Mackenzie offering cautious approval to the Abbott government’s direct action policy.
Ian Dunlop – the former coal miner turned climate campaigner – was unsuccessful in his bid to join the BHP board after winning less than 4 per cent of the vote.
All other motions, including the remuneration report, were approved.
BHP chairman Jac Nasser said he expected the Chinese economy to grow at more than 7 per cent next year, and continue to be an important driver for the commodities industry.
Mr Nasser said he was confident of the continued recovery of the US economy ”despite some risk from the unwinding of monetary stimulus”.
He says uncertainty will continue in Europe, but Asia should enjoy ”strong growth”.
Mr Mackenzie also commented on BHP’s recent decision to pull out of an offshore oil joint venture in the Philippines with ASX-listed Otto Energy.
Otto recently said it was taking legal advice over BHP’s exit, but when asked if the company was liable over the withdrawal, Mr Mackenzie said ”we don’t believe so”.
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