BHP Billiton Passes on [Vancouver] Potash Export Facility – by Rhiannon Hoyle (Wall Street Journal – June 25, 2014)

SYDNEY— BHP Billiton Ltd. BHP.AU -0.69% let an exclusivity agreement lapse that would have given it the right to develop a potash export facility for its Canadian Jansen project at Washington state’s Port of Vancouver.

The world’s biggest miner wants to build its potash unit into a “fifth pillar” of its business alongside commodities such as iron ore and copper. BHP said it decided not to renew the agreement for Port of Vancouver’s near-100-acre terminal five site as it evaluates how quickly it needs to bring the Jansen project into production. The exclusivity arrangement expired last week.

A BHP spokeswoman said the move would allow management to “to actively investigate and assess alternative rail and port options” in Canada and the U.S., although BHP declined to comment on what could be the other leading options for fertilizer export.

“We have said we will continue to modulate the pace of Jansen development as we time our entry into the potash market to meet market demand,” the spokeswoman said in an emailed statement. “This disciplined approach gives us the flexibility to consider a broad range of options for the rail and port, including the Port of Vancouver.”

Melbourne-based BHP has regularly reiterated its commitment to the Jansen project in Canada’s Saskatchewan province, although its current investment covers only early work, including the sinking of production-and-service shafts.

Management has said they are taking their time on the development, which could ramp up to an expected capacity of 10 million metric tons a year in the decade after 2020. They have been looking for a partner to help shoulder the cost of what could become one of the world’s biggest potash mines.

Port of Vancouver Chief Executive Todd Coleman said he was “confident that we can find a new tenant for terminal five in the near future,” although he said he is also eager to continue discussions with BHP on the possibility of shipping potash through the export hub in the future.

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