MINING giant BHP Group on Friday announced significant delays and cost increases at its Canadian potash venture, Jansen, Reuters reported on Friday.
Some $1.7bn in cost overruns could take total expenditure for the first phase of Jansen to between $7bn and $7.4bn, said the miner in its second quarter production report. The project was costed at $5.7bn in its first budget estimate, said the newswire.
The Australian miner attributed the project cost increases to design modifications, expanded project scope, and disappointing productivity levels. First production has been pushed back to mid-2027 from the previously accelerated target of late 2026.
BHP is also considering delaying the second phase by two years until fiscal 2031, citing anticipated additional potash supply entering the market.
“Given potential for additional potash supply coming to the market in the medium term, and as part of our regular review of the sequencing of capital projects under the capital allocation framework, we are considering a two-year extension for the execution of Jansen Stage 2,” the company said.
The setback represents a major disappointment for BHP, which has invested more than a decade in the project as part of efforts to diversify beyond its traditional copper and iron ore business. The company had accelerated development following the Russia-Ukraine conflict, betting on fertiliser supply disruptions and higher prices.
Despite the Jansen challenges, BHP reported record performance elsewhere. Copper production reached two million tons (Mt) in fiscal 2025, whilst iron ore output from Western Australia operations hit 290Mt.
Jefferies analysts noted the increased capital expenditure guidance was negative, though acknowledged BHP’s strong quarterly operational performance.
