BHP Billiton’s petroleum and potash chief Tim Cutt has reportedly told The Australian the mining giant will stick to plans for the Jansen project in Canada’s Saskatchewan potash basin, despite the project’s long lead-time.
Cutt reportedly told the NewsCorp paper that the $19.2bn project was one of 2003-2007 chief executive Chip Goodyear’s better investments, even though it likely won’t produce potash until the 2020s.
“[The investment has been] one of the smarter strategic moves a company could have made,” Cutt was quoted as saying.
“We moved in at a time when acreage was available. The competition didn’t think third-parties would come in and amass that type of acreage.
“Saskatchewan is the one, big, large tier-one basin in the world.”
Potash refers to a mined or manufactured salt that contains potassium in water-soluble form. Deriving its name from ‘pot ash’, it is used in fertiliser and a number of other industrial products.
BHP’s simplified structure following the spin-off of South32 earlier this month features four ‘pillars’ of business, one of which is petroleum and potash.
The Saskatchewan basin holds 65% of the world’s potash resource, and BHP holds “a lot” of the undeveloped acreage in the region, Cutt reportedly told the paper.
“And we’re sitting there in a great position, because we’re building big shafts that will have up to 12mtpa of capacity, and we can build [Jansen] in phases.”
The mining giant has so far spent roughly US$4bn at Jansen.