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BHP Billiton Ltd., the world’s biggest mining company, may end up “mothballing” its Canadian potash project by the end of this decade after completing two shafts at a cost of about $2.6-billion.
The shafts at the giant potash deposit in Saskatchewan are now at a depth of about 600 metres, with a further 300 to 400 metres to go, chief executive officer Andrew Mackenzie told analysts and investors in London on Tuesday. Upon their completion in 2018 or 2019, the board will decide whether to build the mine, he said.
“It’s certainly perfectly possible, if at that time the market is not going to be ready for potash, say, in three years subsequently, that we could mothball the shafts once we’ve completed them,” Mackenzie said.
The comments are the most pessimistic the CEO has been on a project that the company describes as the world’s best undeveloped potash resource. The Jansen project is about 60 per cent complete with about $200-million left to spend in fiscal 2017. Mackenzie said recent progress at Jansen indicated the final cost will likely be below $2.6-billion.
The miner has slowed development amid a slump in prices for the crop nutrient. BHP has previously flagged potash as a potential key division for future growth, identifying the fertilizer as a priority alongside existing coal, copper, iron ore and petroleum units to tap rising consumption and an expanding middle class across Asia.
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