UPDATE 1-BHP submits environment study for Jansen mine

* Mine to produce 8 mln tonnes/year potash, 70 year LOM

* BHP expects environmental review complete in H1 2011

* Shares up 0.42 pct at 2515.5 pence on LSE

(In U.S. dollars unless noted)

TORONTO, Dec 17 (Reuters) - BHP Billiton (BHP.AX) (BLT.L) said on Friday it submitted an environmental impact statement for its Jansen potash project in Canada, a preliminary step in developing a huge new source of the mineral fertilizer.

The provincial government of Saskatchewan will review the statement from the Anglo-Australian miner, a process that is expected to be completed in the first half of 2011.

BHP, the world's top mining group, says Jansen, located some 140 kilometers (87 miles) from Saskatoon, could rank as the largest potash mine in the world. It is set to produce about 8 million tonnes of potash a year and would operate for 70 years, the company said.

BHP has started drilling at Jansen in preparation for ground freezing, a requirement to build the mine shafts.

Earlier this year BHP was unsuccessful in its $39 billion bid for Saskatoon, Saskatchewan-based Potash Corp (POT.TO), the world's largest potash producer.

Shares of BHP were up 0.42 percent at 2515.5 pence on Friday on the London Stock Exchange. (Reporting by Julie Gordon; Editing by Frank McGurty)