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BHP eyeing lower cost production at Jansen

The Jansen project project in Saskatchewan

The Jansen project project in Saskatchewan

17th May 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Potash production from mining giant BHP’s Jansen Stage 2 project, in Canada, was expected to come in at a lower cost than the Stage 1 operation.

CEO Mike Henry told delegates at the Bank of America 2023 Global Metals, Mining & Steel Conference, in Barcelona, that while studies for the Stage 2 expansion was not yet complete, the company expected capital intensity for Stage 2 of between $1 000/t to $1 200/t, which is lower than Stage 1.

The miner in February announced that it would bring forward the Stage 2 studies at Jensen, which is scheduled to be completed during the 2024 financial year. This followed a previous decision to bring forward first production at Jansen Stage 1 from 2027 to the end of 2026.

“Jansen Stage 1, the first stage remains on track and on budget, and in fact we have been able to accelerate first production from 2027 into late 2026. We have recently started blasting and excavation works at the bottom of the shaft, and we’re looking forward to a productive summer construction season, with a continued focus on civil and mechanical construction activities on the surface and underground.

“In parallel, we have accelerated studies on Jansen Stage 2, and expect to have the option to trigger an investment decision on that second stage within the 2024 financial year. All major permits are in place for Stage 2, and we have the necessary port capacity,” Henry said. added.

“Should we proceed, Stage 2 will add an additional four-million tonnes per annum of potash capacity, with possible first production estimated to be in the 2029 financial year, around the time Jansen Stage 1 will be finishing its ramp up. So we’d see Stage 1 ramp up starting in 2026 through 2029, and then we’d be able to roll Stage 2 on to the back of that.”

Henry told delegates that BHP was excited about the pipeline of growth projects that the company has in potash, adding that the long-term fundamentals for the market are compelling and have improved further since it sanctioned Jansen Stage 1.

Meanwhile, BHP is also working to increase production at its Australian iron-ore assets, with the miner continuing to look at initiatives to grow its production to 300-million tonnes a year over the medium-term, from the current rate of between 280-million and 290-million a year.

“This low capital intensity volume increase involves further debottlenecking our port and rail systems, the rollout of autonomous haulage trucks, and ongoing productivity enhancements,” Henry said.

“Beyond that, we are studying options to grow our annual production to 330-million tonnes as well. Some of the alternatives that we’re assessing are a further debottlenecking of our port and rail systems and adding a sixth car dumper. These studies are currently underway and they’ll be concluded in 2025.

“They will have to compete against other options in the BHP portfolio for capital and growth, and we’ll make a decision at that time whether or not we pull the trigger and elect to proceed.”

Edited by Creamer Media Reporter

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