BHP Faces $1 Billion Cost Increase for Massive Potash Mine

BHP mines commodities including iron ore, copper and coal. The former FTSE 100 group has consolidated its former dual company structure around a primary listing in Australia, dropping out of London’s blue-chip index in 2022 as a result. The Jansen mine in Saskatchewan is BHP’s first foray into potash production, driven by a belief that there will be growing demand for the fertiliser ingredient as the global population grows and arable land comes under pressure. Construction of the first phase of the mine, targeting production of 4.15 million tonnes a year, was now 75 per cent complete, the company said. “The majority of the cost increase since the estimated range announced in July 2025 is from construction hours and quantities of materials that were not included in previous execution cost estimates,” BHP said. “These construction costs were identified following the comprehensive review of Jansen stage one budget and schedule.” It had blamed the initial increases on “inflationary and real cost escalation pressures, design development and scope changes and lower productivity outcomes”. • BHP boss: I have ‘zero regrets’ over failed Anglo American bids BHP also confirmed as stated last summer that it did not expect to start production until mid-2027, reverting to the original schedule after ditching ambitions for an accelerated start. The company said it had now “implemented a response plan to address cost and schedule risks for Jansen stage one, which has improved productivity, strengthened project management and enhanced oversight of execution contracts”. Brandon Craig, its president of Americas, said: “Jansen is an important pillar in BHP’s long-term growth strategy and is a long-life, low-cost, expandable asset that is expected to generate benefits for shareholders for decades. We remain positive about the progress at Jansen and in potash as a future-facing commodity with strong long-term demand fundamentals driven by population growth, better diets, rising living standards and the need for more productive and sustainable use of arable land.” BHP said it would update the market on the costs of the second phase of Jansen alongside its full-year results in the summer.