Key facts
- BHP Group announced a $2.3 billion writedown for its Jansen potash mine in Canada.
- The estimated investment for the Jansen project's second stage has been raised to $6.9 billion from $4.9 billion.
- The first stage of the project is expected to cost $8.4 billion, a nearly 50% increase from its 2021 approval.
- BHP shares experienced their worst session in over a year following the announcement.
- The mining major's stock decline impacted the broader mining index.
Shares of BHP Group experienced their most significant decline in over a year, falling 5.6% to A$61.4 on Friday, after the company disclosed a $2.3 billion charge linked to cost overruns at its Canadian Jansen potash project. This marks the third instance of cost and timeline estimate revisions for the project, which is central to BHP's strategy to diversify beyond copper and iron ore. The estimated investment for the project's second stage has been increased to $6.9 billion from $4.9 billion due to factors including inflation and design development. The first stage is now expected to cost $8.4 billion, a nearly 50% increase from its 2021 approval, with production slated to begin in mid-2027. Despite these overruns, BHP maintained its annual capital expenditure forecast at $11 billion for the 2027 financial year. The company views potash as a key pillar for future growth, essential for food security and sustainable farming, and expects Jansen to capture 10% of the global potash market once fully operational.