Mon, Aug 26, 2013 - Page 15 News List

BHP to pursue potash venture


BHP Billiton Ltd, the world’s biggest miner, will proceed with its plans for a Canadian potash project that has been called “misguided” by its biggest shareholder, driven by the prospect of strong investor returns.

“We are continuing on this investment because we strongly believe, and we’ve talked a lot about it with the board, this is going to offer very high returns for shareholders in the decades to come,” BHP chief executive officer Andrew Mackenzie said in an interview yesterday on the Australian Broadcasting Corp’s Inside Business program, according to an e-mailed transcript. “We have the best undeveloped green field mine on offer to the world and what we are doing, we will be prepared to respond very quickly to the market when it’s needed.”

Russia’s OAO Uralkali, the largest potash producer, last month quit a marketing venture with Belarus’ state producer that controlled about 43 percent of global exports and kept limits on production, and signaled prices may fall by as much as a quarter.

BHP said on Tuesday last week that its projections for the project assume a shift away from the current market dynamic.

Melbourne-based BHP last week said it is seeking partners for the Jansen project after approving spending of US$2.6 billion. The company has been approached and has approached possible purchasers of a stake in the project, Mackenzie said then.

“I’m looking for a partner that will add value,” Mackenzie said in a separate interview with the Australian Financial Review newspaper, aired on Channel Nine yesterday.

The potential partners are in “a wider range than just some of our mining peers that would be interested in a project like this,” Mackenzie said.

“We will take our time about pushing the button of the development of a major mine that will absolutely reflect our ability to afford it but more importantly, the ability to earn strong returns for our shareholders,” Mackenzie added.

Potash is a fertilizer ingredient that strengthens plant roots and improves their resistance to drought.

Mackenzie, 56, succeeded Marius Kloppers as CEO of BHP in May. In August last year, Kloppers put major project approvals, including Jansen, on hold amid lower prices and waning demand for raw materials.

Projects that remain shelved include the Olympic Dam iron-ore port expansion in South Australia and the outer harbor iron ore project in Western Australia.

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