BHP reported in talks with Nutrien on potash partnership

A view of BHP’s potash mine project north of Jansen, Sask. (BHP.com)

Reuters — BHP Group is in discussions with fertilizer maker Nutrien about a partnership in the miner’s massive potash project in Saskatchewan, Bloomberg reported Wednesday, citing sources.

Potential options include Nutrien acquiring a stake in BHP’s mine at Jansen, Sask., or becoming the mine’s operator and selling the potash through its channels, the report said, adding that the talks were private and there was no guarantee of a deal yet.

BHP and Nutrien did not immediately respond to a Reuters request for comment.

Investors have raised concerns over the Jansen project recently, worried that a potash oversupply over the next decade could crimp returns. They believe BHP may fare better by investing more in commodities.

Australia-based BHP, the world’s biggest listed miner, has already sunk US$4.5 billion into the project and forecast more in annual capital expenditure, as it edges toward making a final investment decision on the mine by mid-year.

BHP has been developing the site at Jansen — about 60 km southeast of Humboldt — since 2010, around the same time as it launched an ill-fated takeover bid for Saskatoon-based PotashCorp.

PotashCorp went on to merge in 2018 with rival Canadian fertilizer firm Agrium to form Nutrien, which currently owns six Saskatchewan potash mines.

Nutrien buying a stake in Jansen makes no sense for either company, BMO Capital Markets analyst Joel Jackson said separately in a note.

A broader joint venture between Nutrien and BHP involving the potash assets of both companies has more potential, he said.

— Reporting for Reuters by Anushka Trivedi in Bangalore; additional reporting by Rod Nickel and Jeff Lewis.

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