LONDON, Oct 24 (Reuters) - BHP Billiton, the world’s largest mining company, said on Thursday it would stick to a “wait and see” approach in its expansion into potash, as it continues to seek potential partners for a $14 billion Canadian project.
BHP plans to invest $2.6 billion over the next four years in the Jansen potash project to keep its options open, but has delayed production until at least 2020, looking for the right time to enter the market for the fertiliser ingredient.
Answering questions from shareholders in London on the impact of changes in the potash market after the breakup of one of two dominant cartels - the joint venture between Russia’s Uralkali and Belaruskali in neighbouring Belarus - CEO Andrew Mackenzie said BHP was progressing at Jansen, but was cautious.
“We are derisking the project by doing some of the technically difficult (work) such as sinking the shafts - that will be complete in three or four years and then we can move very fast,” he told the annual general meeting.
“If circumstances were to change we could speed up, but I would say right now ... (it is) good idea just to wait and see.”
BHP - which told shareholders it expects global commodity demand to grow by up to 75 percent over the next 15 years - said it would build rather than take another tilt at potash producers like giant Potash Corp - a company BHP unsuccessfully bid for in 2010, and a move the miner says it will not repeat.
“Under most scenarios, (Jansen) would be a very high return project for shareholders, however we can make it even better by getting our timing to market right,” Mackenzie said.
BHP has said it would seek to bring partners into Jansen to spread risk and cost, and confirmed on Thursday that it was in discussions. Mackenzie declined to give details.