BHP touts high grade potash assets in Sask.

Melbourne-BHP Billiton on June 7 confirmed the strength of its position in the Saskatchewan potash basin in Canada with the reporting of an in-situ mineral resource of 3,370 million mt @ 25.4 percent K₂O at its wholly-owned Jansen Potash Project. It said the project is nearing the end of its pre-feasibility study and is anticipated to progress to feasibility in the second half of 2010. Based on the current schedule, the project is expected to produce saleable potash beginning in 2015. The Burr project, acquired with Athabasca Potash in early 2010, is currently under review in the context of BHP Billiton’s full potash development portfolio. Exploration in the Melville area, also acquired with Athabasca Potash, is due to begin in July 2010. In total, BHP says it has exploration rights to a total of over 14,000km² of highly prospective ground in the Saskatchewan basin. “Potash is strategically important for BHP Billiton, offering the group an avenue for significant growth and further diversification by commodity, customer and geography,” said Graham Kerr, president of BHP Billiton’s Diamond and Specialty Products. “Jansen is the most advanced project in our potash development portfolio and is backed up by our other greenfield projects at Boulder and Young, and the rest of our land position. We believe Saskatchewan could be the next long-life, low-cost expandable basin play for BHP Billiton. Today’s announcement indicates a considerable high grade resource which will provide BHP Billiton a significant entry into the potash industry.” Jansen is being planned to reach an eventual full production capacity of approximately 8 million mt of saleable potash per year. The potash-bearing zone will be mined using the conventional long room and pillar method already used by BHP Billiton in several locations around the world. The company has selected the location of the surface facilities to support the mine and is preparing to commence ground freezing in late 2010. Ground freezing is necessary to safely and successfully sink the mining shafts because of the presence of local aquifers common to the region. BHP Billiton has allotted pre-commitment funding of US$240 million to support continued engineering study, regulatory permitting, and completion of the ground freezing process. In related news, the Canadian press reports that SaskWater has begun preliminary planning for a C$100 million plus water pipeline to service BHP’s new mine. BHP would reportedly pay the capital cost of the project and then turn it over to SaskWater, which would own and operate it on a fee-for-service basis.