BHP Revises Jansen Stage Two Cost Estimate to $6.9 Billion After Comprehensive Review

BHP has updated its total investment estimate for Stage Two of the Jansen potash project in Canada, raising it from $4.9 billion (A$6.98 billion) to $6.9 billion following a detailed review of cost and schedule forecasts.

The company now expects production from Stage Two to begin in the latter part of fiscal year 2031 (FY31), a delay of approximately two years relative to earlier projections.

Approval for Stage Two was granted in October 2023, with an initial cost estimate of $4.9 billion. In August 2025, BHP announced a two‑year extension to the project timeline, moving the anticipated production start to FY31.

The company has indicated that an updated capital expenditure (capex) estimate will be released in the second half of FY26.

The revised figure reflects a comprehensive review carried out during the extension period, which examined project delivery, cost drivers, and schedule milestones.

BHP attributes most of the increase to additional construction hours, higher material volumes, and cost escalations identified during the assessment.

By the end of May 2026, Stage Two was reported to be 16 % complete, with engineering progress at 83 %. BHP noted that this progress has reduced the risk associated with the remaining work.

The company continues to forecast Stage Two output at approximately 4.36 million tonnes per annum (mtpa).

With a planned two‑year ramp‑up, BHP expects combined Jansen production to reach 8.5 mtpa, representing roughly 10 % of global potash output.

At consensus potash prices, the updated internal rate of return for Stage Two is 11 %, with an anticipated payback period of eight years.

Underlying earnings before interest, taxes, depreciation, and amortisation margins are expected to remain above 65 %.

BHP states that once Stage Two achieves full ramp‑up, the combined Jansen mine will be the lowest‑unit‑cost Canadian potash operation, with costs in the $114–$130 per tonne range—a figure consistent with estimates at the time of approval.

Given the higher projected capital intensity, BHP expects an impairment charge of approximately $2.3 billion, before and after tax, in its 2026 financial results related to its investment in the project to date.

Stage One remains on track for first production by mid‑calendar year 2027, in line with the updated cost and schedule set in January 2026.

BHP does not anticipate changes to its group capex guidance for FY27, which remains around $11 billion.

BHP Americas president and CEO‑elect Brandon Craig said, “BHP continues to invest in its long‑term growth strategy. Jansen is a key pillar of BHP’s strategy and will provide exposure to a future‑facing commodity with strong demand fundamentals and portfolio diversification benefits.”

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