PotashCorp sees good sense in BHP’s fertiliser go-slow #potash
Potash Corp sees good sense in BHP’s fertiliser go-slow
- by: BARRY FITZGERALD
- From: The Australian
- September 25, 2014 12:00AM
CANADA’S leading potash producer Potash Corp says there is good reasoning behind BHP Billiton’s decision to go slow on its push in to the global fertiliser industry with the development of its Jansen project in Saskatchewan.
It comes down to Potash Corp — the group BHP tried to take over in 2010 for $40 billion — and its fellow producers already having the capacity to cover what growth there will be in the market until around 2020, effectively locking out Jansen.
Potash Corp chief financial officer Wayne Brownlee told a fertiliser conference in Toronto this week that there would not be any meaningful supply additions from outside of the Canpotex marketing arm used by Potash Corp, Mosiac and Agrium over the next three years, probably drifting “up close to 2020’’.
Under its original planning, Jansen was meant to be in production next year. But based on its own assessment of market demand, BHP said last year it could take to the “decade beyond 2020’’ before Jansen was ramping up to design capacity.
The broad agreement between BHP and its Canadian competitors that Jansen’s market opening is around 2020 is in keeping with BHP’s decision to modulate the rate at which it spends the $US2.6bn ($2.9bn) it has committed to at least finish the excavation and lining of the production shafts to gain access to the deeply buried resource.
BHP chief executive Andrew Mackenzie refers to Jansen as a potential “fifth pillar’’ for the company alongside iron ore, petroleum, copper and coal.
Last month he was quizzed by on the timing at Jansen. “We are taking this very slowly,” he said. “We want to do it right, in terms of the technology for developing the shaft, which is the most difficult part.