BHP Group, the world's largest miner, announced it will take a $2.3 billion writedown on its Jansen potash mine in Saskatchewan, Canada. This charge comes after the latest in a series of cost and time overruns for the project's expansion. The phase two expansion is now estimated to cost $6.9 billion, which is a $2 billion increase from the previous forecast of $4.9 billion approved in 2023. This marks the third time BHP has exceeded its cost and time estimates for the two stages of the Jansen project.
The increased costs are attributed to inflationary and real cost escalation, design development and scope changes, lower productivity outcomes, and additional labor hours and material quantities needed to complete the project. As a result of these overruns, first production for the phase two expansion is now expected toward the end of 2031, a significant delay from earlier projections. Earlier reports in August 2025 had already shifted first production from FY2029 to FY2031.
Analysts at Jefferies expressed concern, noting that the cost increase exceeded expectations and called the update "unhelpful" given a poor foreseeable outlook for potash. Despite these setbacks and the $2.3 billion impairment, BHP maintained its annual capital expenditure forecast at $11 billion for the 2027 financial year. The company continues to view Jansen as a strategic asset for diversifying beyond copper and iron ore, aiming for a combined output of 8.5 million tonnes per annum from both stages, representing approximately 10% of total global potash production.
