When Marius Kloppers speaks, the effects ripple across the world.
Kloppers, chief executive officer of BHP Billiton, recently told Caixin Media Co. that the company would “wait and see” on new projects for 18 months to two years, and there would be no major approvals for six months.
Naturally, media outlets jumped all over this statement, in part because a BHP decision on the Jansen potash mine near LeRoy, Sask., was slated for this year.
“The potential delay of a huge potash project is dampening some of the excitement around Saskatchewan’s boom,” said the Globe and Mail May 31.
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Work continues at the mine, delay or no delay. It’s fascinating what can be done when you have deep enough pockets.
BHP has already spent $2 billion on the feasibility phase of Jansen, which would ultimately cost $12 billion to bring on stream. Considering the amount of infrastructure already in place at Jansen, not to mention a substantial BHP office presence in Saskatoon, you would think this mine was already approved.
Not so, and at least one competitor does not believe it will be.
Bill Doyle, president and CEO of PotashCorp, has not held back on expressing his view that the Jansen mine — deep pockets or not — will not go ahead.
“We know there are no new greenfield mines coming at us (in the next five years),” he recently told The Saskatoon StarPhoenix.
Doyle has previously said that the costs associated with developing a greenfield potash mine are huge and unaffordable in the present environment — even for BHP.
Adding to Doyle’s credibility, the current global economic backside-kicking is indeed likely to be felt in prairie commodity sectors.
That being said, it would be unfortunate if Doyle proves to be right. Delaying or stopping the Jansen development would be tragic for the rural municipality of LeRoy, which has put tonnes of work into such things as road development and permitting in anticipation of job and tax revenue creation. In addition, farmers have sold land and moved off homesteads to accommodate the miner.
LeRoy reeve Jerry McGrath perhaps said it best: he doesn’t want to contemplate the mine not going ahead after all the change that has already occurred.
“Anything can be replaced,” McGrath told WP reporter Karen Briere earlier this spring. “Except people.”
