BHP shares slide on Jansen potash cost blowout

BHP shares posted their steepest single-day decline in 14 months on Friday after the world’s largest miner flagged a $2.3bn writedown on its Jansen potash project in Canada, reported Bloomberg News.Shares fell 5.6% in Sydney on Friday, while BHP’s London-listed stock dropped 4.4% on Thursday amid another round of cost and schedule overruns at the Saskatchewan development project. Its phase two development will now cost $6.9bn, up from a previous estimate of $4.9bn, with first production pushed to late 2031, said Bloomberg News.Barclays estimates the company has spent $20.3bn on Jansen to date, of which $4.1bn has now been impaired. The bank’s analysts calculate a combined internal rate of return of 7.1% across both development phases, roughly half of BHP’s own earlier projections, and flagged upside risk to medium-term capital expenditure guidance.BHP approved the Jansen mine in 2021 after years of investor scepticism over its price tag, then accelerated into a phase two expansion in 2023 — before phase one had produced a ton — as fertiliser prices spiked following Russia’s invasion of Ukraine. Prices have since retreated while costs across both phases have continued to escalate.BHP regards Jansen as a century-long asset with the potential to eventually rival its Australian iron ore business in scale. First output from phase one is expected next year, said Bloomberg News.The post BHP shares slide on Jansen potash cost blowout appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com