‘It’s going to be a huge impact for our city’: Humboldt preparing for growth as BHP unveils new Jansen timeline

‘It’s going to be a huge impact for our city’: Humboldt preparing for growth as BHP unveils new Jansen timeline

Published on: May 17, 2017 | Last Updated: May 17, 2017 7:50 AM CST

 BHP jansen at sunrise

BHP Billiton says its Jansen mine east of Saskatoon could be producing potash as early as 2023. BHP BILLITON


Rob Muench has been looking forward to BHP Billiton bringing its multi-billion-dollar Jansen potash mine into production since the corporation started exploring the land 140 kilometres east of Saskatoon more than a decade ago.

The massive project has experienced significant delays, but Humboldt’s mayor said he is cautiously optimistic that the company can keep to its latest proposed timeline and get the massive mine up and running within the next six years.

“It’s going to be a huge impact,” Muench said, noting that the city of 6,900, which is 44 kilometres northwest of the mine site, is already beefing up its infrastructure in preparation for hundreds of workers moving to the area.

BHP Billiton has until recently declined to provide a timeline for the mine — which is estimated to cost US$14 billion, likely the largest corporate investment in Saskatchewan history — beyond saying it could enter production after 2020.

That changed on Tuesday, when CEO Andrew Mackenzie told a conference in Barcelona that the mine’s first phase could go to the Melbourne-based company’s board of directors for approval next summer and be operational in 2023.

“We’re looking at a phased expansion into Jansen with an initial stage of four million tonnes per annum, and that will generate competitive returns,” Mackenzie said.


That is good news for Muench and Lanigan mayor Andrew Cebryk, who expects his community — which is even closer to the site than Humboldt — will absorb around 20 per cent of the mine’s permanent employees.

“It’ll be a boon to the community — we’ll be able to expand our horizons,” Cebryk said,

BHP Billiton has committed around US$3.8 billion to the project to date, of which US$2.6 billion is being spent on sinking two mine shafts thought to be capable of handling around 10 million tonnes of potash each year.

Further expenditures must be authorized by the company’s directors. Mackenzie said bringing the first phase online will cost an additional US$4.7 billion, bringing the company’s total commitment to about US$8.5 billion.

Building the necessary processing plant, ore storage facility and other infrastructure could create 2,500 construction jobs, while running it will require up to 600 people, said Chris Ryder, BHP Billiton Canada’s head of corporate affairs.


It’s not surprising that BHP Billiton clarified its timeline, but millions of tonnes of new and curtailed capacity in Saskatchewan and around the world could pose a problem, said BMO Capital Markets analyst Joel Jackson.

The company’s plans are contingent on global demand growing steadily and consistently, but that has not happened in several years and it is not yet clear where new demand for potash will come from, Jackson added.

Other potash producers with operations in Saskatchewan expect demand will increase in the coming years, but have spent the last 18 months aggressively cutting costs in response to weak prices, a result of global supply outstripping demand.

Mackenzie told the conference that BHP Billiton “will only develop (Jansen) when the time is right.” Ryder added that the company’s plan is based on its view of what the market will look like in six years, and that it is subject to change.

Muench and Cebryk say they are well aware that nothing is certain until BHP Billiton’s directors issue their final approval. At the same time, both know too much is at stake to not prepare for an influx of workers in the coming years.

“We’re going to make sure we’re prepared, but yet don’t jump in too far ahead of where we need to be,” Muench said.




About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on May 17, 2017, in economic impact, political, potash. Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: