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Jansen potash mine not on hold, BHP says

A spokesman for BHP Billiton said Wednesday that development of a $12 billion US mine in Saskatchewan has not been put on hold, despite the firm's announcement it was shelving $68 billion in new project approvals.
BHP says excavation of two underground shafts is due to be done to their full depth of about one kilometre by the end of 2014. (BHP Billiton)

A spokesman for BHP Billiton said Wednesday that development of a $12 billion US potash mine in Saskatchewan has not been put on hold, despite the firm’s announcement it was shelving $68 billion in new project approvals.

CEO Marius Kloppers said with $22.8 billion committed to capital projects, no new approvals are expected in 2013.

Spokesman Bronwyn Wilkinson told CBC News there’s still enough funding — $1.2 billion — committed to Jansen to continue with development work "through this year."

BHP, the world's biggest mining company, was only explicit about putting its proposed $30 billion Olympic Dam development in Australia — which would have become the world’s biggest uranium mine — on hold, leaving it unclear where the other $40 billion in cuts were coming.

During a conference call, Kloppers declined to provide a target date for approval of the Jansen project.

The Jansen mine, 140 kilometres east of Saskatoon, was expected to open by 2015 and to produce up to eight million tonnes of potash a year.

Wilkinson said that start up date has been moved later – but would not say by how much – because BHP has decided to expand the first phase of the project from two million to four million tonnes per year, and that will require more design work.

Saskatchewan Premier Brad Wall said the expansion plans may mean a slight delay as the project has to be re-engineered, but said he does not expect this change will throw the project dramatically off schedule.

"They've decided to spend more money in Saskatchewan," said Wall. "So if it's a delay...It's the best kind of delay I've heard of for our economy...they're going to add more people to their staff."

Shafts to be 1 km deep

Excavation of two underground shafts has reached 45 metres and will be done to their full depth of about one kilometre by the end of 2014, Wilkinson said.

As well, the firm has completed 25 kilometres of exploration drilling in the Saskatchewan basin.

The decision to delay capital spending came as BHP announced 2012 earnings of $15.4 billion, down more than a third from $23.6 billion the year earlier. The company blamed rising development costs and lower metals prices.

Revenue rose to $72.2 billion from $71.7 billion.

The Jansen mine, 140 kilometres east of Saskatoon, was expected to open by 2015 and to produce up to eight million tonnes of potash a year.

Last week, Brazilian mining company Vale announced it was putting development of its proposed $3 billion potash mine near Kronau, 30 kilometers southeast of Regina, on hold.

That was due to open in late 2016, employing between 300 and 500 people and producing nearly three million tonnes annually.

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