MELBOURNE, Australia – BHP Billiton says it is investing US$2.6 billion to finish preparing the Jansen Potash project in Saskatchewan.
The Australian company says the investment will be spread over a number of years with completion of two mining shafts expected during 2016.
Today’s announcement will take BHP Billiton’s total commitment to the site 140 kilometres from Saskatoon to approximately US$3.8 billion.
Saskatchewan had opposed BHP Billiton’s attempted takeover of Potash Corp. (TSX:POT) in 2010 and the deal was eventually blocked by the federal government.
The Jansen project is 100 per cent owned by HPB Billiton (NYSE:BHP).
The company calls Jansen the world’s best undeveloped potash resource and it expects it to produce ten million tonnes of potash a year for more than 50 years.
BHP Billiton says as the world’s population grows and incomes in emerging economies improve, agricultural demand is expected to rise. It says this will increase the need for potash and new mines.
“Investment at Jansen is creating a valuable asset and we will continue to pursue a development path that maximizes returns for shareholders,” said BHP Billiton CEO Andrew Mackenzie,
Tim Cutt, the company petroleum and potash president, said Potash and Jansen represent a significant opportunity for the Australian firm.
”Saskatchewan, with its attractive geology and stable political and fiscal environment, is the best place in the world to develop a potash business. ”
BHP Billiton also said Tuesday that its annual profit fell nearly 30 per cent on lower prices for copper, coal and iron ore.
The company reported a $10.9 billion profit for the year ended June 30, saying its bottom line was also dented by one-time charges of $922 million.
BHP said record production was offset by lower commodity prices amid slowing global economic growth.