BHP Group (NYSE:BHP) has revised the total investment estimate for Stage 2 of its Jansen potash project in Canada to $6.9 billion, up $2 billion from the $4.9 billion approved at sanction in October 2023, with first production now targeted for late fiscal year 2031.
The increase reflects additional construction hours, higher material quantities and cost escalation identified during a detailed review, undertaken after an August 2025 decision to extend the project timeline by two years.
As a consequence of higher forecast capital intensity across the full Jansen project, including potential future expansions beyond Stage 2, BHP currently expects to recognise an impairment charge of approximately $2.3 billion, before and after tax, against its investment in Jansen when it reports full-year results to 30 June.
The project is 16% complete as of the end of May, with engineering 83% done.
BHP maintained its return projections at consensus potash prices: an internal rate of return of 11%, a payback period of eight years, and underlying EBITDA margins above 65%.
At full ramp-up, the combined Jansen mine is expected to produce 8.5 million tonnes per annum, representing approximately 10% of global potash supply, at a unit cost of $114 to $130 per tonne.
Stage 1 remains on track for first production in mid calendar year 2027, and group capital expenditure guidance for fiscal year 2027 is unchanged at approximately $11 billion.
