BHP Group Ltd. has signed non-binding sales agreements for potash production from both phases of the group’s mine under construction in Jansen, Sask., according to a Reuters report citing Chief Commercial Officer Ragnar Udd. He declined to name the companies.
According to Udd, BHP seeks to turn the agreements into binding contracts, typically lasting one year, as production comes online in late 2025 or early 2026. The mining group expects to ramp up to 4.35 million mt/y capacity in two years (GM Feb. 23, p. 30). The second phase, approved by BHP in late October last year (GM Nov. 3, 2023), will boost Jansen’s annual output capacity to some 8.5 million mt when fully ramped up.
BHP plans to sell potash to distributors rather than directly to retail companies that resell to farmers, Udd said. Selling to distributors reflects the fact that BHP does not own a potash distribution network, he said, and allows it to focus on what it does best, namely production.
BHP CEO Mike Henry told participants at the BMO 2024 Global Metals, Mining & Critical Minerals Conference in Miami on Feb. 27 that the group has seen strong market interest in Jansen potash and that its marketing team had secured “sufficient MOUs with buyers around the world to more than cover sales as the mine ramps up.”
Responding to a question about selling to the US market, Udd said he would not give specifics about BHP’s US plan but said the group is “quite comfortable” with its ability to compete there.
The group is spending an estimated $5.7 billion on Jansen Stage 1 and gave the go-ahead last October for a further $4.9 billion investment on Jansen Stage 2. This is on top of an initial capex spend of some $4.5 billion before the project’s first phase was even approved.
Longer-term, Jansen has the potential for two additional expansions to reach an ultimate production capacity of 16-17 million mt/y, subject to studies and approvals.
BHP hopes to expand its presence in Canada beyond the giant Jansen project. The “impressive” stability of the country’s fiscal and policy regime “allows us to continue to invest in Canada and hopefully beyond potash,” Udd told Bloomberg TV in Toronto on March 4.