BHPB potash project may cost US$10 billion
mining-journal.com
Publishing Date
02 Jun 2009 3:32pm GMT
Author
Mining Journal
BHP Billiton may need to spend US$10 billion to develop a potash project in Canada, Goldman Sachs JBWere Pty said.
Once completed, the Jansen mine may be able to supply as much as 8Mt/y, equivalent to about 15% of global sales, Goldman analysts led by Neil Goodwill said in a report.
Demand for potash, used mostly in fertiliser, may increase as population growth forces the world’s farmers to grow more food more efficiently to save space, Mr Goodwill said. At current prices, the global potash market is worth US$28 billion, he said.
“Growth has been around 3% per annum with India and China having the potential for significantly increasing this growth trend,” Mr Goodwill said. “We would expect BHP to look to acquire if the conditions are right in order to accelerate its potash position and reduce the marketing risk.”
Construction may begin at Jansen in July 2011, with first production in January 2015, BHPB said in a document lodged with the Saskatchewan Ministry of Environment in November. It may take 10 years to reach capacity, the company said.
Chief executive Marius Kloppers said in February that BHPB’s expansion preference in potash would be through the purchase of producing mines rather than undeveloped deposits. |
