BHP Billiton Dispatches Top Manager to Much-Watched Potash Project – by ALISTAIR MACDONALD, RHIANNON HOYLE and ELENA CHERNEY (Wall Street Journal – September 29, 2014)

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Industry Will Watch Closely for Clues to Company’s Next Move for Massive Mine

BHP Billiton BLT.LN -0.32% PLC. has sent its top project manager to run the giant Jansen potash development in western Canada, a move the potash market will scrutinize for clues to BHP’s plans for its Canadian mine. BHP Billiton’s Phil Montgomery, its head of group project management, last month arrived in Saskatchewan from Australia, a spokeswoman said.

At stake is a mine that—if producing today—would increase global supply of the key fertilizer ingredient by almost 15% according to Scotiabank. That would worsen an oversupply problem for potash. The price of potash, which is fixed through long-term contracts, has rallied by as much as 17% this year on better-than-expected demand, according to analysts. Analysts, though, and some BHP executives, believe that this rally will fade as the increase in demand fizzles.

BHP has already committed some $3.8 billion to a project that it says has no fixed completion date. Last December, work was halted for several months amid technical trouble.

“Jansen has become almost mythological in the industry,” said Matthew Korn, an analyst at Barclays, BARC.LN +0.64% said of the project and the prospects of it being finished. “We know it is there, we know it represents a load of volume, but in terms of timing I don’t think anyone believes this will happen before 2020, if at all,” Mr. Korn added.

Despite Mr. Montgomery’s move and a recent rally in the price of potash, the world’s largest miner says it is no closer to making a decision on whether to greenlight the Saskatchewan mine. Senior executives aren’t convinced by the rally and remain worried about the overall state of the market, according to people familiar with matter. Many analysts share that pessimism.

One of the people familiar with the matter said that Mr. Montgomery’s move should not be interpreted as sign that BHP is becoming more aggressive about developing the mine.

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