JANSEN — A final decision on whether BHP will move ahead with a potash mine near Jansen has been pushed forward due to some unforeseen difficulties with shaft construction as well as the pandemic.
The decision will be made by BHP’s board of directors in mid-2021. Originally the plan was to make the decision by February 2021.
Chris Ryder, BHP’s acting manager of corporate affairs for potash, said Aug. 21 they had some challenges – which have since been resolved – in removing the massive boring machines and placing equipment used to install a permanent liner for the site’s two shafts. The production shaft is 975 metres deep while the service shaft is 1,000 metres deep.
“We also had the unexpected impact of COVID-19 and our response plan to that, which meant we needed to limit people in confined spaces and it affects work,” he said.
Due to the pandemic, the mining company temporarily suspended work in the service shaft in late March. Work resumed in June.
There were also fewer people working at the site. In late May, Ken Smith, the manager of corporate affairs for potash, told the Humboldt Journal there were 250 working at the site. Ryder said there are now 300 to 350 people at the site depending on what’s being worked on, which is normal.
“The combination of those two things just meant that we felt we weren't going to be ready to take the best case forward for sanction in February and therefore we’re looking at the middle of 2021 instead.”
Ryder said the work needed to prepare the site is 86 per cent complete. When the service and production shafts are complete, BHP expects it will have spent around US$3.7 billion on the site.
The change of date in making a final decision was announced by Mike Henry, BHP’s CEO, in an Aug. 18 webcast discussing the company’s 2019-20 financial year end.
“Jansen is a tier one deposit with potential to be one of the lowest cost operations in the world,” he said.
Henry said potash is important to the company as it looks to diversify. The company currently mines iron ore, coal, petroleum, copper, natural gas, nickel and uranium.
“Decarbonization, electrification, diet, land use and population trends will all drive higher demand for copper, nickel and potash in the medium to longer term,” he said. “We're therefore looking to grow in these future facing commodities.”
If the mine is given the go-ahead by the company, the initial stage would require US$5.3 to US$5.7 billion to be built and would produce four million tons of potash per year. It would be BHP’s first entry into the potash industry.
The second stage would see production increase to eight million tons and provide work for 1,000 full-time jobs, with 800 to 850 of those local, making the Jansen site the largest potash mine in the world.
