BHP delays Jansen potash project as costs surge; logs record copper output

By Roushni Nair and Sameer Manekar

(Reuters) -BHP Group flagged on Friday a delay and a cost overrun of up to $1.7 billion at its key Jansen potash project in Canada, while the world’s largest listed miner logged record copper and iron ore output in fiscal 2025.

The cost overrun and delay are a major setback for BHP, which has spent over a decade on the project to diversify from copper and iron ore, and accelerated its development on bets that the Russia-Ukraine conflict would disrupt fertiliser supply and boost prices.

BHP now expects to spend between $7.0 billion and $7.4 billion for the first stage of the Jansen project, up from the original estimate of $5.7 billion, pointing to higher costs, changes in design and scope, and subpar productivity.

The miner postponed first production to mid-2027 from the accelerated end-2026 target, and is also weighing extending its first output target for the second stage by two years to fiscal 2031, citing expected additional supply in the medium term.

"Given potential for additional potash supply coming to the market in the medium term, and as part of our regular review of the sequencing of capital projects under the capital allocation framework, we are considering a two-year extension for the execution of Jansen Stage 2," the miner said in a statement.

Jefferies analysts said in a note that the increase in capex guidance was a negative, though BHP operated well in the quarter.

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BHP’s copper output was a record high of 2.02 million metric tons (Mt) in fiscal 2025. However, it expects it to drop to between 1.8 Mt and 2.0 Mt in fiscal 2026, due to planned lower grades at its flagship Escondida mine in Chile.

Iron ore production at its Western Australia operation came in at 290 Mt for the year, also a record high, and beat the Visible Alpha consensus of 288.1 Mt. Fourth-quarter output of 77.5 Mt was also ahead of the consensus estimates.

Meanwhile, BHP said it was assessing a potential divestment of its Western Australia Nickel assets as part of a review, citing balance sheet impacts from the nickel business.

Shares of the miner were trading 2.8% higher at a four-month peak of A$40.2, as of 0335 GMT, outpacing a 2% rise in the mining sub-index.

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