BHP Jansen Stage 2 Potash Cost Rises to $6.9B; $2.3B Impairment
BHP Group Ltd announced a significant update for its Jansen Stage 2 Potash Project, increasing the total investment estimate from $4.9 billion to $6.9 billion due to additional construction hours, material quantities, and escalation. First production for Stage 2 is now projected for late FY2031, a two-year delay from the original FY2029 target. As a result of higher forecast capital intensity, BHP expects to recognize an impairment charge of approximately $2.3 billion related to its Jansen project investment. Despite these revisions, the company reaffirms the project's strategic importance, its expected low unit cost position, and its contribution to BHP's long-term growth in future-facing commodities.
Key Highlights
- BHP's Jansen Stage 2 potash project investment estimate increased from $4.9 billion to $6.9 billion.
- First production for Jansen Stage 2 is now estimated in late FY2031, a two-year extension.
- BHP expects to recognize an impairment charge of approximately $2.3 billion (before and after tax) related to the Jansen project.
- Jansen Stage 2 is 16% complete, with engineering at 83% complete as of May 2026.
- Jansen Stage 2 is expected to deliver approximately 4.36 million tonnes per annum (Mtpa) of production.
- Combined output from Jansen (Stage 1 & 2) is expected to be 8.5 Mtpa, delivering ~10% of global potash production.
- Jansen Stage 2 has an updated internal rate of return of 11% and an expected payback period of 8 years.
- The combined Jansen mine is expected to be the lowest unit cost Canadian potash mine at $114-130/t.
- Jansen Stage 1 first production remains on track for mid CY2027.
Price Impact
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