$7.5 billion BHP funding in Jansen potash mine ‘unmitigated excellent news,’ says prof

“It is a vote of confidence within the potash trade and the way forward for potash going ahead. (BHP) will not be going to make this sort of funding once they assume this sort of funding is dangerous.”

“That’s unmitigated excellent news,” stated Bruneau, an affiliate professor and the division head of economics on the College of Saskatchewan.

The premier stated the Australian mining firm BHP Group made the choice “whereas we had been all sleeping final evening,” to approve capital funding within the mine, with the aim of extracting potash by 2027.

You are reading: $7.5 billion BHP funding in Jansen potash mine ‘unmitigated excellent news,’ says prof

The mine is predicted to supply 4.35 million tonnes of potash yearly for as much as 100 years. Moe stated the cumulative funding from BHP is “the biggest non-public financial funding that our province has ever seen.”

Bruneau stated this mission can have a major affect on the province and its potash trade, as the numerous sum of cash appears to point a level of religion in Saskatchewan potash.

“It’s a vote of confidence within the potash trade and the way forward for potash going ahead. (BHP) will not be going to make this sort of funding once they assume this sort of funding is dangerous,” stated Bruneau.

The mine was first introduced in 2010 and already $5.7 billion has been spent on the mission, however, there was some hesitation from the corporate and its shareholders in regards to the future viability of the location. Shortly after the announcement of the mine east of Saskatoon, the corporate began digging two, roughly 1,000-metre deep shafts as a part of the operation.

The BHP Billiton Jansen mine site near Lanigan on November 25, 2010
The BHP Billiton Jansen mine website close to Lanigan on November 25, 2010Picture by Gord Waldner /Saskatoon Star Phoenix

Bruneau stated uncertainty arose from the associated fee and viability of the product when the mine lastly got here on-line. As for different potash producers in Saskatchewan, Bruneau stated this may possible be excellent news for them as properly, because the Jansen mine may function a rallying second for international potash capital.

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“It’s a vote of confidence within the trade itself,” he stated.

The premier remarked upon the way forward for Saskatchewan as a potash producer because the demand grows for the mineral.

“We’ve got the meals, the gas, the fertilizer that the world does want,” stated Moe.

“BHP will be a part of Saskatchewan’s different world-class producers — Mosaic, Nutrien, Okay+S — who’ve collectively, over the course of the previous 15 years, invested over $20 billion in capital tasks proper right here in Saskatchewan.”

In the course of the convention, the premier emphasised that the potash mined in Saskatchewan is “essentially the most sustainable potash that’s produced on the planet.”

And because the province charts its restoration popping out of the pandemic, Moe stated “we are going to see potash proceed to play an outsized function in Saskatchewan progress over the course of the following decade.”

In an announcement from the corporate Mike Henry, BHP CEO, stated funding on the Jansen mine is consistent with the corporate’s technique “of rising our publicity to future dealing with commodities.”

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The assertion went on to say the funding offers the corporate “elevated leverage to key world mega-trends, together with rising inhabitants, altering diets, decarbonisation and enhancing environmental stewardship.”

One level burdened by the federal government throughout its information convention was the steadiness provided by investing in Saskatchewan versus different potash-rich areas of the world.

Bronwyn Eyre, minister of vitality and assets, talked about potash-rich Belarus and Russia. Each nations have confronted sanctions and each nations, in response to Bruneau, provide a level of uncertainty for mining corporations.

“That’s going to kill enterprise with them,” stated Bruneau.

As building begins, Moe stated the mission will make use of some 3,500 individuals every year. And as soon as the mine is operational, greater than 600 individuals can have full-time jobs. BHP can have company workplaces in Saskatoon. The corporate additionally stated it goals to have gender parity in its workforce and can purpose to have 20 per cent Indigenous illustration amongst its staff.

One other important element from the information of the day was that BHP is merging its oil and fuel property with an Australian firm that would be the majority shareholder.

Whereas BHP isn’t getting out of the oil and fuel realm, their deal with potash and, to a level, taking a backseat on oil and fuel reveals Bruneau that the corporate is wanting lengthy into the longer term.

“Oil and fuel, I imply, it simply has a extra unsure future,” he stated.

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