BHP delays $14 billion Canada potash push
BHP has long planned to break into the potash industry, targeting a lucrative new business that has been controlled by two cartels, as developing countries look to grow more food over the next few decades.
It has already invested $1.2 billion in Jansen and the timing of its entry has been closely watched by the world's major producers, led by Potash Corp of Saskatchewan, which BHP tried to take over in 2010.
Its $39 billion bid was blocked by Canada on fears that potash prices and royalties would drop as BHP planned to split from the North American cartel. Now Russia's Uralkali has given potash producers a taste of what could happen as it recently quit the Belarusian Potash Co cartel.
Mackenzie said once Jansen's shafts and infrastructure are in place, the mine would be about three years away from production, but the company would decide on when to begin producing based on the market and its ability to fund further development.
BHP believes the project will generate returns well above the company's average returns over many decades, he said.
"As long as we get the timing right, we're not overly aggressive, we think those returns are there," Mackenzie said.