BHP has more good things to say about Jansen
At today's annual general meeting in London, BHP Billiton (ASX:BHP NYSE:BHP) boss Marius Kloppers, again came out in apparent support for the world's number one miner's potash mega-project.
With its $33 billion Olympic Dam uranium-copper project out of the picture for the foreseeable future and the $22 billion Outer Harbour iron ore terminal expansion also on the back burner, Jansen potash in Canada could turn out to be only survivor of BHP's "austerity" program.
Bloomberg reports BHP is still waiting from some lease approvals and a "substantial amount" of engineering work to be completed on the project, but quotes Kloppers as saying: “We think we’ve got a good project. We do have quite some time ahead of us before we need to consider additional approvals.”
Earlier this week Canadian investment bank BMO Capital Markets had little good to say about the greenfields project in the province of Saskatchewan.
According to Global Saskatoon the bank believes the potash market is oversupplied and Jansen is as unattractive as Olympic Dam and Outer Harbour – BHP should rather return cash to shareholders or buy Mosaic (NYSE:MOS), one of the big three North American fertilizer minerals suppliers.
Jansen was the response of Kloppers to Canada's blocking of its hostile takeover bid for Potash Corp of Saskatchewan (TSX: POT).
The company has already spent more than $1.2 billion to bring the project to the feasibility stage and has undertaken some construction.
Jansen has the potential to become the world's biggest potash mine and could cost as much as $14 billion to construct according to some estimates.
What makes Jansen attractive is that start-up could happen as early as 2015 and produce 8 million tonnes per annum (and a 70-year mine life doesn't hurt either).
It would also be sweet revenge for the Anglo-Australian miner to put up shop in Potashcorp's backyard after being so summarily dismissed two years ago.
And it would be a fitting response to Potashcorp's brash CEO Bill Doyle who famously said in May of Jansen "we’ll believe it when we see it" and that "they [BHP] can’t make the numbers work."