BHP in no rush to build potash mine

Reuters / BHP Billiton says it won’t decide soon on whether to build the world’s biggest potash mine in Western Canada, a project some say would exacerbate a global glut of the fertilizer.

In late August, BHP pushed back to at least June 2013 a decision on building an eight-million-tonne mine at Jansen, Sask., but emphasized it would still proceed with construction and was planning to double the first phase of production. The Anglo-Australian mining giant has been aiming to start production in 2015.

But now chief executive Marius Kloppers has suggested there’s little urgency to proceed.

“The guys still have their lease agreements to complete, they have a substantial amount of engineering to complete,” he said. “We do have quite some time ahead of us before we need to consider additional approvals.”

BHP continues to dig two shafts and build surface facilities at the mine site. Analysts estimate the mine could cost up to $14 billion to complete, and some analysts say buying U.S. potash producer Mosaic makes more sense.

The world’s potash capacity surplus looks to climb as high as 19.3 million tonnes by 2020 from 11.3 million tonnes in 2012 due to expansions and potential new mines, including Jansen.

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