BHP CEO change should not hurt big Canada potash project - analyst

20 February 2013 15:28  [Source: ICIS news]

TORONTO (ICIS)--The leadership change at Anglo-Australian mining major BHP Billiton is not likely to affect the company’s plans for the giant greenfield Jansen potash project in Canada’s Saskatchewan province, an analyst said on Wednesday.

BHP said earlier on Wednesday that CEO Marius Kloppers would step down in May, to be succeeded by Andrew Mackenzie.

In 2010, Kloppers failed in a high-profile $39bn (€29bn) bid to acquire Canada’s PotashCorp. But BHP has said it would nevertheless proceed with developing Jansen, which may ultimately produce some 8m tonnes/year of potash.

Terence Ortslan, managing director of Montreal-based mining and metals research firm TSO & Associates, said that the change in CEO should not affect Jansen.

While Mackenzie would undoubtedly reallocate BHP’s capital spending, sell some assets and may slow some projects, Jansen was a viable long-term project whose full development went beyond the “lifecycle of a CEO, it takes a long time to do it,” Ortslan said.

Potash remained a great industry to be in and assets such as Jansen were hard to come by, he added.

However, some Canadian market observers have said that it may be unwise for BHP to move forward with Jansen, at least in the short run, given current and projected potash prices.

($1 = €0.75)

By: Stefan Baumgarten
+1 713 525 2653

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