20 August 2013 14:03 [Source: ICIS news]
TORONTO (ICIS)--The new chief executive of Anglo-Australian mining major BHP Billiton said on Tuesday that the long-term outlook for potash remains strong and that the company will continue to pursue its big Jansen potash project in ?xml:namespace>
BHP’s projections for the industry assumed “a shift away from the current marketing dynamic, and we believe the potash price will ultimately reflect the cost of adding new supply,” he said.
The comments by CEO Andrew Mackenzie came amid market uncertainty following last month’s announcement by Russian potash major Uralkali that it would withdraw from its joint export sales venture with Belaruskali and expand its own potash production while accepting price reductions - a move many observers believe will dampen long-term prospects for potash prices.
Jansen is the world’s “best undeveloped potash resource, capable of supporting a mine with annual capacity of 10m tonnes for more than 50 years,” according to BHP.
“Annual investment at Jansen of approximately $800m (€600m) will form an important part of [BHP’s] capital and exploration budget,” Mackenzie said.
Continued development of Jansen reflected BHP’s confidence in the “compelling long term fundamentals of the potash industry,” he added.
BHP Billiton said it was investing $2.6bn to finish the excavation and lining of the Jansen project's production and service shafts and related infrastructure projects on the site.
The investment will be spread over a number of years, with completion of both shafts expected during 2016 while associated work will extend into 2017, the company said.
Mackenzie took over as CEO earlier this year from Marius Kloppers. In 2010, Kloppers had failed in a high-profile $39bn bid to acquire
($1 = €0.75)
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