By Roushni Nair and Sameer Manekar
(Reuters) -BHP Group flagged on Friday a delay and a value overrun of as much as $1.7 billion at its key Jansen potash undertaking in Canada, whereas the world’s largest listed miner logged document copper and iron ore output in fiscal 2025.
The associated fee overrun and delay are a serious setback for BHP, which has spent over a decade on the undertaking to diversify from copper and iron ore, and accelerated its growth on bets that the Russia-Ukraine battle would disrupt fertiliser provide and enhance costs.
BHP now expects to spend between $7.0 billion and $7.4 billion for the primary stage of the Jansen undertaking, up from the unique estimate of $5.7 billion, pointing to increased prices, modifications in design and scope, and subpar productiveness.
The miner postponed first manufacturing to mid-2027 from the accelerated end-2026 goal, and can also be weighing extending its first output goal for the second stage by two years to fiscal 2031, citing anticipated further provide within the medium time period.
“Given potential for extra potash provide coming to the market within the medium time period, and as a part of our common overview of the sequencing of capital tasks underneath the capital allocation framework, we’re contemplating a two-year extension for the execution of Jansen Stage 2,” the miner stated in a press release.
Jefferies analysts stated in a observe that the rise in capex steerage was a destructive, although BHP operated effectively within the quarter.
BHP’s copper output was a document excessive of two.02 million metric tons (Mt) in fiscal 2025. Nevertheless, it expects it to drop to between 1.8 Mt and a pair of.0 Mt in fiscal 2026, resulting from deliberate decrease grades at its flagship Escondida mine in Chile.
Iron ore manufacturing at its Western Australia operation got here in at 290 Mt for the yr, additionally a document excessive, and beat the Seen Alpha consensus of 288.1 Mt. Fourth-quarter output of 77.5 Mt was additionally forward of the consensus estimates.
In the meantime, BHP stated it was assessing a possible divestment of its Western Australia Nickel belongings as a part of a overview, citing steadiness sheet impacts from the nickel enterprise.
Shares of the miner had been buying and selling 2.8% increased at a four-month peak of A$40.2, as of 0335 GMT, outpacing a 2% rise within the mining sub-index.
(Reporting by Roushni Nair, Sameer Manekar, and Roshan Thomas in Bengaluru, Melanie Burton in Sydney; Modifying by Devika Syamnath and Subhranshu Sahu)
