Manufacturing Biz #6 - Magazine - Page 25
“Jansen is an important pillar in BHP’s
long-term growth strategy and is a
long-life, low cost expandable asset
that is expected to generate benefits for
shareholders for decades.”
increases have been driven by inflationary
and real cost escalation pressures,
design development and scope changes
and lower productivity outcomes.The
majority of the cost increase since the
estimated range announced in July 2025
is from construction hours and quantities
of materials that were not included in
previous execution cost estimates.
These construction costs were identified
following the comprehensive review
of Jansen Stage 1 budget and schedule.
BHP has implemented a response plan to
address cost and schedule risks for Jansen
Stage 1 which has improved productivity,
strengthened project management and
enhanced oversight of execution contracts.
This plan is expected to support sustained
efficiency gains in the delivery of Jansen
Stage 1 and improved capital intensity in
subsequent phases of the Jansen Project.
Jansen Stage 1 continues to progress and
is 75% complete. BHP continues to expect
Jansen Stage 1 to deliver approximately
4.15 million tonnes per annum (Mtpa) of
production. At consensus prices, Jansen
Stage 1 has an updated internal rate of
return of 7.9% to 9.1% and an updated
expected payback period of 11 to 15
years from first production2. Underlying
EBITDA margins for Jansen Stage 1 remain
strong at approximately 63% to 64% due
to its low-cost position3.BHP President
Americas, Brandon Craig said: “Jansen is
an important pillar in BHP’s long-term
growth strategy and is a long-life, low
cost expandable asset that is expected
to generate benefits for shareholders
for decades. Once operational, Jansen
will establish BHP as a leading player in
the global potash industry. We remain
positive about the progress at Jansen and in
potash as a future facing commodity with
strong long-term demand fundamentals
driven by population growth, better
diets, rising living standards, and the
need for more productive and sustainable
use of arable land.”BHP is continuing to
advance construction of Jansen Stage 2
and will implement the project execution
improvements identified in the review of
the investment cost and schedule estimates
for Jansen Stage 1. BHP expects to update
the market on the investment expenditure
estimate for Jansen Stage 2 in Q4 FY2026.
Longer term, Jansen has the potential for
two additional expansions to reach an
ultimate production capacity of 16 to 17
Mtpa (subject to studies and approvals).
Read the full report here.
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