Posted on ASX websiteAre BHP serious about Jansen?The sovereign...

Posted on ASX website

Are BHP serious about Jansen?

The sovereign risk in Eretrea is small bikies compared to money they've lost with other projects over last decade --and one third the capex required by Jansen.

If I was a BHP shareholder I'd be alarmed at stated intent of this statement.

But the 10 - 15 year timeline is interesting.
If you presume Coluli would be in production by then its hard to imagine that the market would not be radically impacted by its far superior economics such that Jansen's feasibility would be even worse than now.


BHP Adopts 'Wait and See' Approach to Developing Canadian Potash Project

Posted on 25 October 2013 2:10 | By Alex MacDonald | Dow Jones Institutional News



LONDON--Mininig titan BHP Billiton Ltd (BHP) is adopting a "wait and see" approach to developing its Canadian potash project with a view to getting the timing of the project just right in order to maximize shareholder return, the company's chief executive said Thursday.

BHP gave the go-ahead earlier this year to invest $2.6 billion in its Jansen potash project but refrained from giving a timeline for when the project will start production. Potash is a potassium-based ingredient used in fertilizer.

"We think that under most scenarios this will be a very high return project for shareholders," BHP CEO Andrew Mackenzie told shareholders at the company's annual general meeting. "But we are uncertain about timing," he later told reporters, noting that the company is waiting for a gap to appear in the market that will maximize the project's return to shareholders. He said the gap could appear sometime in the next ten to 15 years, although he said it could be earlier or later.

For the moment BHP is focusing on derisking the investment by completing some of the more difficult parts of the project, such as sinking shafts, over the next three to four years, he noted. Once the shafts have been sunk, the company can move quickly to develop the project if the opportunity presents itself, he added.

"If circumstances were to change we can actually even speed up now, but I would say right now...it's actually quite a good idea just to wait and see." He said the company is waiting to see what will happen to the potash market now that Russian potash producer Uralkali (URKA.RS) ended its long-running partnership with Belarussian potash producer Belaruskali. The partnership was part of a cartel approach to marketing potash, which ensured that potash prices globally remained relatively well supported in order to ensure a return on projects.

BHP had said that the company would be interested in bringing in a partner to develop the Jansen project. Mr. MacKenzie confirmed that the company has talked to "many" counterparties about a potential partnership with some returning calls but he didn't provide further details.

Write to Alex MacDonald at [email protected]

(END) Dow Jones Newswires

October 24, 2013 14:10 ET (18:10 GMT)