BHP delays Jansen potash output to 2027, costs climb

BHP (ASX, NYSE LSE: BHP) says first production from its flagship Jansen stage one potash project in Saskatchewan will be delayed by at least six months to mid-2027, with capital costs climbing as much as 30% to $7.4 billion (C$10.1 billion).

The world’s largest listed miner had originally planned to begin output at the Canadian project by the end of 2026. BHP attributed the $1.3–$1.7 billion increase in costs to changes in design and scope, inflationary pressure, and construction productivity falling short of expectations.

“Given potential for additional potash supply coming to the market in the medium term, and as part of our regular review of the sequencing of capital projects under the capital allocation framework, we are considering a two-year extension for the execution of Jansen stage two,” BHP said in a statement on Friday.

BHP approved a $4.9-billion investment in Jansen stage two in October 2023, but has spent just $400 million of that to date. The second stage had been expected to begin production by mid-2029. Jansen’s higher costs mark a major setback for BHP’s push to diversify into the fertilizer sector. The company accelerated its potash development after Russia’s invasion of Ukraine, betting on sustained higher prices amid sanctions on Russian and Belarusian producers.

Record copper

The setbacks come despite strong overall operational results, with BHP reporting record copper production of 2.02 million tonnes for its 2025 fiscal year, at the top end of guidance. However, the company forecast output would fall to between 1.8 million and 2 million tonnes in 2026 due to declining ore grades at its primary Escondida mine in Chile.

The company’s fourth-quarter production of iron ore, copper and metallurgical coal production were in line with estimates by BMO Capital Markets.

“However, this is overshadowed by surprising timing/capex slips at Jansen,” mining analyst Alexander Pearce wrote in a note on Friday. “Further, stage two could be delayed by two years — likely good for potash prices, but could pressure overall project capex.”

Shares in BHP closed 3% higher in Sydney on Friday at A$40.29 apiece, valuing the company at A$205 billion (US$134 billion)

Record iron ore

The miner also posted record iron ore production of 290 million tonnes for the year, with 77.5 million tonnes in the fourth quarter alone, topping analyst expectations. Shares in BHP rose 2.9% to A$40.26 in Sydney trading on Friday, outperforming the 1.6% gain in the mining sub-index.

In a separate update, BHP said it is reviewing options for its Western Australia Nickel operations, including a potential divestment. The company cited the business’s impact on the group’s balance sheet as it continues to assess long-term portfolio fit.