SASKATCHEWAN – Uncertainty has overtaken the Jansen potash development 140 km east of Saskatoon as owner BHP Billiton posted a loss of US$6.4 billion for the year ended June 30, 2016. Weak commodity prices, the failure of the tailings dam at the Samarco joint venture in Brazil, and offshore US asset impairments have all taken their toll.
The company has already spent about US$3.8 billion, $2.6 billion of that to sink a pair of shafts to depths of 600 metres, and there remain 300 or 400 metres more to reach designed depth.
BHP Billiton CEO Andrew Mackenzie told analysts and investors in London earlier this week that the project may be halted before it goes into production. “It’s certainly perfectly possible, if at that time the market is not going to be ready for potash, say, in three years subsequently, that we could mothball the shafts once we’ve completed them,” he said.
Potash prices remain low, about US$228 per tonne at the end of last month. And there currently is ample supply. The Jansen mine, with a potential output of 8 million t/y, would only tip the supply-demand equation further out of balance.
Visitors to www.BHPBilliton.com can read details in the company’s financial results for the year ended June 30, 2016.