BHP (ASX, NYSE:BHP) (LON:BLT), the largest mining company by market capitalization, sees potash as a key commodity in which to base its future growth despite prices are still hovering around $230 a tonne, less than half what they were only five years ago.
Speaking at the in Barcelona, Spain, chief executive Andrew Mackenzie confirmed the company鈥檚 commitment to the crop nutrient that聽the first phase for the company鈥檚 massive Jansen potash mine will be completed within six years.
BHP could seek approval from the board for Jansen鈥檚 expansion as early as June 2018, said chief executive Andrew Mackenzie.
鈥淎s we聽currently see it, we鈥檙e looking at a phased expansion into Jansen with an initial stage of four million tonnes per annum, and that will generate competitive returns,鈥� .
He added the company could seek approval from the board for such expansion as early as June 2018, with production beginning in 2023.
鈥淎s we progress this聽project we continue to optimize the聽development path as to how we might add a mine to those shafts so we can reduce risk and unlock value,鈥� Mackenzie聽noted.
The world鈥檚 number one mining company has committed to date a total investment of $3.8 billion to move Jansen into production. From that total, $2.6 billion have聽been set aside聽for surface construction and the sinking of shafts,聽though analysts predict聽the total cost will be close to聽$14 billion.
According to BHP鈥檚 leader, a phased expansion of Jansen 鈥� which is projected to produce 8聽million tonnes of potash a year or nearly 15% of the world鈥檚 total 鈥� is expected to generate competitive returns in stage 1, with significant potential upside in subsequent stages.
However, he didn鈥檛 seem in any rush to finish the project. Instead, he said that, as with every venture BHP embarks on, the company will only develop it 鈥渨hen the time is right.鈥�