Jansen mine is a vital ‘growth option’ for BHP Billiton: CEO

BHP Billiton’s chief executive says the Anglo-Australian mining giant is open to “some form of sell down or joint venture” at its multibillion-dollar Jansen potash mine under construction about 135 kilometres east of Saskatoon.

“(But) it’s been our experience to date that without a clear route to sanction … it is difficult to attract a large number of potential buyers,” Andrew Mackenzie told reporters and analysts Tuesday on a conference call.

The massive mine remains an “important growth option” for the Melbourne, Australia-based company, which is optimistic about the future of commodities over the next several decades, Mackenzie added, striking a more positive tone than in previous reports.

“We are trying to find ways of breaking (further capital expenditures) up into the smallest possible modules but also with the most respectable forms of capital productivity,” he said. “(But) it is going well.”

That outlook is consistent with the company’s stated plan to bring Jansen — which has an estimated capacity of eight million tonnes per year — into production in the decade following 2020. However, the mine’s future remains mired in uncertainty.

BHP Billiton has so far committed US$3.8 billion to the project, of which US$2.6 billion is currently being spent on the shafts. Analysts have estimated the mine will cost US$14 billion to finish, and further expenditures must be authorized by its board of directors.

The company said Tuesday that work is nearly two-thirds complete and “tracking to plan.”

Chris Ryder, BHP Billiton Canada’s head of corporate affairs, told the Saskatoon StarPhoenix last month that the work will take another “couple of years” to complete.

BHP Billiton on Tuesday reported earning US$3.2 billion in the six months ended Dec. 30. By comparison, it took a US$6.4 billion loss in the fiscal year ended June 30, largely due to one-time writedowns.