News: RIO BHP CEO says supply disruptions may last years; may speed up Jansen project

SYDNEY, May 17 (Reuters) - Supply chain disruptions in the mining sector could take up to three years to resolve, the chief executive of the world's largest listed miner BHP Group (BHP) warned on Tuesday.

Mike Henry also said that the Anglo-Australian miner may accelerate its Jansen potash project in Canada by a year, amid growing demand due to the war in Ukraine, as Russia and Belarus accounted for almost 40% of global production.

"Both Ukraine and COVID-19 have led to lowered expectations for Chinese and global GDP growth in the near term," Henry said at the Bank of America Global Metals, Mining & Steel Conference.

"We also expect that the current supply chain disruptions may also take 2-3 years to resolve," he added.

Henry said he expected some economic growth in China to spill over into next year.

"We expect a degree of catch-up when lockdowns do ease," he added.

In a wide ranging speech, Henry said the company's decision to invest in the Jansen potash project will bring greater cash flow stability and returns resilience.

The fundamentals for potash remain strong and were reinforced by the war in Ukraine that caused supply side disruptions, with Russia and Belarus accounting for almost 40% of global production.

"This has positively reinforced the decision we’ve taken to enter potash," Henry said. "So we are making good progress and we’re looking at potential to accelerate Jansen Stage 1 first production into 2026."

The company has also kicked off studies for Stage 2 of the project, he said.

BHP announced a record dividend payout earlier this year after reporting estimate-beating first-half profits, helped by higher commodity prices, despite a cutback in demand from top metals consumer China.

The miner, however, recorded lower estimates for iron ore production for the March quarter as a pandemic-related labour crunch weighed on efforts to boost output.