BHP flags cost overrun at Jansen potash project, to book $2.3 billion charge

BHP said its Jansen Stage 2 potash project in Canada will incur a $2.3 billion charge due to higher costs and additional labour hours, and first production will be delayed. The update points to a material project overrun and weaker near-term economics for the asset. The news is negative for BHP’s capital spending outlook and may pressure sentiment in the stock.

Analysis

BHP said its Jansen Stage 2 potash project in Canada will incur a $2.3 billion charge due to higher costs and additional labour hours, and first production will be delayed. The update points to a material project overrun and weaker near-term economics for the asset. The news is negative for BHP’s capital spending outlook and may pressure sentiment in the stock.