BHP’s update on the Jansen potash project in Saskatchewan, which was part of its operational review for the half year ended December 31st, indicates while production is on track, the costs have continued to climb.

The Jansen potash mine is on track to begin production in mid-2027. However, with Stage 1 described as 75 per cent complete, the cost has been revised to $8.4 billion. The forecast last July was between $7 and $7.4 billion. And in 2021 the project was projected to cost $5.7 billion.

In a news release BHP President Americas, Brandon Craig said, ” We remain positive about the progress at Jansen and in potash as a future facing commodity with strong long-term demand fundamentals driven by population growth, better diets, rising living standards, and the need for more productive and sustainable use of arable land.”

The company says the increased costs are driven by inflationary and real cost escalation pressures with the majority of the cost increase coming from construction hours and quantities of material not included in previous execution cost estimates. The rate of return on Stage 1 from first production is an expected payback period of 11 to 15 years.  The Jansen site is located approximately 140 kilometers east of Saskatoon.