Photo: The higher price tag comes as BHP continues building what it expects will become one of the world’s largest potash operations.
By: Nicole Goldsworthy
Local Journalism Initiative Reporter
SaskToday.ca
BHP says the estimated cost of the second stage of its Jansen potash project has increased by US$2 billion following a detailed review of the project’s cost and schedule.
The company announced in a press release on June 18 that the total investment estimate for Jansen Stage 2 has increased from US$4.9 billion to US$6.9 billion, including contingencies. First production remains scheduled for late fiscal 2031, reflecting a two-year extension announced in 2025.
According to BHP, the revised estimate follows a comprehensive bottom-up review of costs and project delivery that incorporated lessons learned during construction of Jansen Stage 1. The increase is primarily attributed to additional construction labour, higher material requirements and broader cost escalation affecting major projects worldwide.
“This reflects a bottom-up review of cost and schedule, incorporating learnings from Jansen Stage 1,” a BHP spokesperson told SaskToday.
The review continued while engineering and underground construction advanced. As of the end of May, Stage 2 was 16 per cent complete, while engineering work had reached 83 per cent completion.
BHP said the project’s workforce plans remain unchanged despite the higher costs and revised schedule. Thousands of workers are expected during construction, with approximately 900 permanent positions anticipated once the mine is fully operational.
The company said the revised timeline does not change Jansen’s long-term economic contribution to Saskatchewan, with the project expected to continue generating employment, procurement opportunities and economic activity for decades.
Jansen Stage 1 remains 78 per cent complete and is on track to begin production in mid-2027, according to BHP. Once both stages are operating, the mine is expected to produce approximately 8.4 million tonnes of potash annually — about 10 per cent of global production, according to BHP.
BHP said the combined operation is expected to be the lowest-unit-cost Canadian potash mine and will have an estimated mine life of nearly 60 years.
The company also announced it expects to record an impairment charge of approximately US$2.3 billion related to its investment in the Jansen project because of the higher forecast capital costs. The non-cash accounting adjustment remains subject to final review as part of BHP’s 2026 financial results.
Despite the higher capital investment, BHP said Jansen Stage 2 is still expected to generate strong returns, with an estimated internal rate of return of 11 per cent, an eight-year payback period and EBITDA margins exceeding 65 per cent.
BHP president Americas and CEO-elect Brandon Craig said the company remains committed to the project as part of its long-term growth strategy.
“BHP continues to invest in its long-term growth strategy. Jansen is an important pillar of BHP’s strategy and will deliver exposure to a future-facing commodity with strong demand fundamentals and portfolio diversification benefits. With the reset of Jansen Stage 2, we are progressing with our intention of building a Tier 1 asset. The combined Jansen Stage 1 and 2 will be a low-cost, long-life asset with an almost 60-year mine life and is expected to generate benefits for shareholders for decades. Once operational, Jansen will establish BHP as a leading player in the global potash industry.”
A BHP spokesperson said the company continues to view Jansen as a cornerstone of its long-term growth strategy and is advancing the project while working closely with governments, Indigenous partners and local communities.
“For communities around Jansen, the project continues to represent a significant long-term opportunity, and our focus remains on delivering sustained economic, social and partnership outcomes as the project progresses,” the spokesperson said.