BHP inks tentative sales deals for its giant Jansen potash project

BHP (NYSE: BHP; LSE: BHP; ASX: BHP) has signed non-binding sales agreements for all potash production from both phases of its giant Jansen potash project in Canada, as reported by Reuters.

The company aims to convert these agreements into firm offtakes within the next 12 to 18 months, according to BHP’s Chief Commercial Officer, Ragnar Udd.

In October, BHP announced a US$4.9-billion investment in stage two of its potash project in Saskatchewan, to double capacity by the end of the decade.

This investment adds to the US$5.7 billion that the world’s largest miner is already pouring into stage one of Jansen, along with an initial investment of $4.5 billion before the project’s first phase was even approved.

BHP expects potash demand to increase by 15 million tonnes to roughly 105 million tonnes by 2040, representing a growth rate of 1.5% to 3% annually.

Jansen is expected to begin production in late 2026, ramping up to 4.4 million tonnes annually.

The miner anticipates Jansen becoming one of the world’s largest potash mines, doubling production capacity to approximately 8.5 million tonnes per year by late fiscal 2029.

BHP reported that the first stage of the project is 32% complete and progressing as scheduled. The second stage is expected to take six years and produce about 4.4 million tonnes per year at a capital intensity of about US$1,050 per tonne.

BHP plans to sell potash to distributors, rather than directly to companies that re-sell the fertilizer to farmers, Udd said.

Udd also stated that the company has no interest in acquiring the idled Cobre Panama copper mine from First Quantum Minerals.