With its Saskatchewan potash mine project about 70 per cent dug, major Australian mining firm BHP Billiton now says it won’t be seeking board approval to bring the mine into production in 2018.
The company had said in May it expected its mine at Jansen, Sask., about 70 km southeast of Humboldt, to start producing potash in 2023, with board approval for the start-up expenditures expected as early as June next year.
However, in its year-end financial report, released Tuesday, the company said it now anticipates a “later market window” in the potash sector and thus won’t bring the Jansen mine to its board in calendar 2018.
Billiton, in its report, said it’s considering “multiple options to maximize the value of the Jansen project, including further improvements to capital efficiency, further optimization of design and diluting our interest by bringing in a partner.”
The Jansen mine remains in its feasibility study stage, and board approval for production will be sought “only if it passes our strict capital allocation framework tests,” the company said.
Potash demand has been strong so far in calendar 2017, putting a floor under prices, Billiton said in its report, but “higher utilization rates at existing operations and additional greenfield supply will inhibit price inflation in the near term.”
Over the long term, Billiton said, it expects potash demand growth to run between two and three per cent per year, to a point where demand is “outstripping supply” in the mid-2020s.
As for the Jansen mine itself, Billiton said excavation and lining of its shafts are “steadily progressing,” with both shafts “safely excavated and lined through the Blairmore aquifer.” — AGCanada.com Network