BHP (ASX:BHP) has earmarked an additional A$7.7 billion for the second stage of the Jansen potash project in Canada, bringing its total investment in the project to A$23.8 billion, according to a report in The Australian Financial Review.
The move aims to capitalise on disruptions in global fertiliser supplies caused by the Russia-Ukraine conflict.
BHP announced plans to double Jansen's production to around 8.5 million tonnes annually, positioning it among the world's leading potash mines.
The second stage of investment comes amid sanctions that have curbed potash exports from Russia and Belarus, which contribute to around 40% of global production.
The first yield from Jansen's initial stage, costing A$8.9 billion, is slated for late 2026.
Construction for the second stage is expected to span six years, with the first production anticipated in the 2029 financial year, followed by a three-year ramp-up period.
Supply disruption
Prior to its substantial commitment in August 2021, BHP had invested A$7.1 billion in evaluating the site located 130 kilometres east of Saskatoon, Saskatchewan.
Potash is foreseen to diversify BHP's commodity portfolio, including iron ore, copper and nickel, as it does not share their demand and pricing volatility.
BHP chief executive Mike Henry said: "The stage two investment advances BHP's strategy to increase its exposure to commodities positively leveraged to the global megatrends of population growth, urbanisation, rising living standards and decarbonisation."
The Russia-Ukraine war has led to a surge in fertiliser prices, thereby affecting global food production.
"Potash, used in fertilisers, will be essential for food security and more sustainable farming,” Henry added.
BHP also disclosed that Westshore Terminals in Delta, British Columbia, will continue to serve as its primary port for shipping Jansen's potash.
The latest investment includes funds to enhance storage facilities at the port, although a formal capacity extension will be considered closer to the second stage's first production.