someone a while ago had suggested that potash price would be...

someone a while ago had suggested that potash price would be influenced by BHPs development decision at Jansen...bit of old news here (June) , but I see that Jansen wouldn't be developed until at least 2015-16, and that the development decision is still far from certain:

BHP keeps Canadian potash option open
BY:BARRY FITZGERALD From: The Australian June 12, 2013 12:00AM
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BHP Billiton is tipped to pump another $US500 million of pre-approval development capital into its Jansen potash project in Canada in coming months as part of a strategy that could lead to a full-blown $US12 billion development decision in 2015-16.

Question marks have hung over Jansen since BHP stepped away from making new major capital commitments because of the squeeze on cashflows coming from the slump in commodity prices. Last year in Australia, BHP canned the $US30bn Olympic Dam expansion and the $US20bn development of the outer harbour at Port Hedland.

But according to analysts at Goldman Sachs, BHP ultimately will give the go-ahead for Jansen, a project that BHP says represents a potential opportunity to establish a fifth pillar to its four-pillar operating base of iron ore, copper, coal and petroleum.

BHP already has committed or spent $US1.2bn on Jansen to date. The potash resource lies deep beneath Saskatchewan's prairie. While a final go-ahead is pending, production and service shafts are being sunk into the frozen ground.


"We believe that pre-approval capex will continue until the shaft has been completed," Goldmans said. "Thus we see a strong likelihood of an additional $US500m of pre-approval capital being granted to the project in coming months, allowing a delay in the final approval of the project until 2015-16." The sinking of the shaft de-risked the project considerably and its completion "would increase (options) for BHP on what it may do with Jansen around a potential joint venture, partial asset sale or total sale of the project".

Goldmans said that, despite the high capex involved and the long lead time of the development, it believed Jansen had the potential to generate returns above BHP's cost of capital.

BHP's new chief executive Andrew Mackenzie said last week in London said that potash could be significant for BHP in the future. "It is an option, at least, and for us options are what really matter," Mr Mackenzie said.

But he was coy on whether BHP would make the leap into what would be its first soft commodity, reminding his London audience that BHP was intent on reeling in its annual capex from $US22bn this year to $US18bn next year, and lower still to $US15bn in two to three years. He has not said if a go-ahead at Jansen is covered by the lower annual spend.

He said next year's $US18bn capex plan was not a spend "up to" figure. "If because of economic circumstances, project economics or whatever, we do not get sufficient, compelling reasons to invest, then we may not even spend to that level," Mr Mackenzie said.