BHP takes $2.3bn hit on Jansen potash project

Friday, June 19, 2026

BHP has recorded a $2.3 billion writedown on its Jansen potash project due to higher development costs and delayed production timelines extending to 2027 and 2031 for its two phases. This setback challenges BHP’s strategy to diversify into potash markets amid leadership transition and has prompted a 4.4% drop in its London-listed shares.

BHP has announced a $2.3 billion writedown related to its Jansen potash project in Saskatchewan, Canada, citing a significant increase in development costs and delays in the project timeline. The Australian mining giant reported that the cost of the project’s second phase is now expected to be between $2 billion and $2.6 billion higher than previously forecast, depending on the source, with production delays extending to fiscal years 2027 and 2031 for the first and second phases, respectively.

The Jansen project, which marks BHP’s move into potash alongside its existing copper operations, has been a key part of the company’s strategy to diversify away from coal and iron ore towards commodities linked to the energy transition. This adjustment comes as Mike Henry prepares to step down as chief executive on July 1, with Brandon Craig set to take over. The project falls under Craig’s current leadership responsibilities; he emphasized BHP’s ongoing commitment to potash, describing Jansen as a critical component of the company’s strategy and a means to establish BHP as a leading player in the global potash market.

BHP’s expansion into potash began over a decade ago, reflecting its ambitions to tap into fertilizer markets perceived as having strong future demand. However, this move has not been without controversy. Some investors and industry competitors have raised concerns about market saturation. In 2017, activist investor Elliott expressed “deep concerns” regarding BHP’s long-term prospects in potash amid these challenges.

Beyond Jansen, BHP maintains a broader growth agenda that includes acquisitions and attempts to boost its profile in various commodity markets. The company has pursued deals involving major players such as Anglo American and has invested in several smaller rivals and projects across copper, iron ore, gold, and silver. This approach contrasts with rivals like Rio Tinto, which under new leadership has focused on expanding into lithium while divesting smaller assets and infrastructure stakes.

Despite the writedown and delay setbacks, BHP stated that its capital expenditure outlook remains steady at approximately $11 billion for fiscal 2027. Following the announcement, BHP’s shares listed in London fell by 4.4 percent, reflecting investor reaction to the updated financial and operational outlook for the project. The company is scheduled to release its fourth-quarter production results next month, with full-year financial statements to follow later.