BHP moving ahead on Jansen potash mine in Saskatchewan

15 November 2010 18:13  [Source: ICIS news]

HOUSTON (ICIS)--BHP Billiton will move ahead with its Jansen potash mine in Saskatchewan, as it withdraws its hostile $39bn (€28bn) takeover bid of PotashCorp, the company said on Monday.

“We remain committed to Canada, and we plan to develop a significant presence in the potash industry in Saskatchewan,” said BHP chief executive Marius Kloppers.

In the next few days, work is set to start on a ground-freezing programme at the site. Ground-freezing is used to control groundwater prior to the sinking of a mine shaft.

The Jansen mine, so-called because of its proximity to Jansen Lake, is about 90 miles (145 km) east of Saskatoon. It was first proposed by BHP in January 2008.

To date, BHP has invested more than $400m to develop the mine, which is projected to have a production capacity of 8m tonnes/year, according to BHP documents.

The first ore from the Jansen mine is scheduled to be produced near the end of 2014.

Although there are 10 potash mines currently in production in Saskatchewan, there have been no new potash mines opened in the province in almost 40 years, BHP said.

Based on current production estimates, at full capacity the Jansen project will be the largest potash mine in the world, BHP added.

The life of the mine is expected to last well over 50 years.

BHP provided the update on the Jansen project after the company withdrew its offer for PotashCorp.

“Unfortunately, despite having received all required anti-trust clearances for the offer, we have not been able to obtain clearance under the Investment Canada Act and have accordingly decided to withdraw the offer,” Kloppers said.

In a statement, PotashCorp said BHP Billiton's decision upheld the view that the unsolicited offer "substantially undervalued" the company and "failed to reflect both the value of our premier position in a strategically vital industry and our future growth prospects".

In mid-day trading at the New York Stock Exchange (NYSE), BHP stock traded at $88.82/share, up about 2% from Friday’s close.

Shares of PotashCorp were trading at $140.16, up 25 cents/share from Friday.

($1 = €0.73)

For more on potash visit ICIS pricing fertilizers
For more on PotashCorp visit ICIS company intelligence
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By: Frank Zaworski
+1 713 525 2653



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