Canadian government pledges up to $100M to help reduce emissions at future BHP potash mine in Sask.

The Canadian government has promised up to $100 million for a potash mine project in rural Sask., run by global Australian mining giant BHP. The intent is to support what officials are calling the "world's most sustainable potash mine."

Feds offer funding for BHP Jansen mine

BHP potash project about 140 kilometres east of Saskatoon
The Canadian government is partnering with mining giant BHP to make the Jansen potash mine in Saskatchewan more sustainable. (Submitted by BHP)

The Canadian government has offered up to $100 million to help global Australian mining giant BHP create the "world's most sustainable potash mine" in rural Saskatchewan. 

​BHP's Jansen mine project, located ​about 140 kilometres east of Saskatoo​n, is currently in development and is expected to be operational by 2027. It's planned to be the largest potash producing mine in the world,.

Canadian officials are putting the money forward to help the company reduce the mine's carbon footprint and invest in more environmentally friendly technology. 

The company said it is committed to reducing emissions. 

"You will see 50 per cent less carbon dioxide coming out of this mine than a traditional potash mine. We're committed to responsible use of water, we will use 60 per cent less water than your average mine in terms of production of potash on a tonne-per-tonne basis," Ragnar Udd, president for minerals America with BHP, said while speaking at the federal funding announcement in Saskatoon on Monday morning.

"We expect that Jansen will generate the lowest direct onsite emissions intensity of any potash mine in North America." 

Udd said BHP expects to use 60 per cent less equipment underground​ for the Jansen mine, while being 2.5 times more productive. 

It will also introduce electric vehicles for underground work, reducing diesel exhaust. Funding will help the mine be more technically advanced, embracing "state of the art" integrated mining systems for boring and bringing the minerals to the surface, Udd said. 

Potash is a potassium-rich salt used mainly as fertilizer by farmers. 

Federal officials said on Monday that the partnership between the government and BHP is expected to benefit the environment and the economy, while addressing growing global food security concerns and shortages. 

Mike Henry, BHP's CEO, noted Russia's invasion of Ukraine has disrupted the global potash supply and emphasized the need for a more stable provider. 

Both Russia and Ukraine are major fertilizer-producing countries. Henry said Canada is seen as a stable jurisdiction that can meet the growing global demand for years to come. 

"We think the need for potash is going to be driven by global population growth, the move to improve diets, and the need for more sustainable agriculture," he said.

BHP committed to the Jansen Stage 1 project last year with a $7.5-billion investment — a decision Henry said was a decade in the making. He said the company's commitment to potash mining in Canada is a vote of confidence for the country. 

The company anticipates its initial production capacity will be 4.3 to 4.5 million tonnes of potash per year, increasing Canada's production of the mineral by nearly 22 per cent. 

Federal Industry Minister François-Philippe Champagne said Canada exported 22 million tonnes of potash last year, and like Henry, he believes the demand will only grow. 

In addition to its green ambitions, officials note that the project is expected to create hundreds of local jobs. BHP has also signed opportunities agreements with six First Nations in southern Saskatchewan in an effort to further economic opportunity and partnership. 

Henry said BHP is accelerating the work on Phase One and launching studies for Phase Two.