BHP aims to grow potash mining into a core business – by Kaori Takahashi (Nikkei Asian Review – June 5, 2017)

Resource giant weighs sell-off of US shale gas assets in restructuring drive

SYDNEY — BHP Billiton is increasing its investment in potash mining and seeking to divest its U.S. shale gas assets. Andrew Mackenzie, CEO of the world’s largest miner, told The Nikkei that “under some circumstances, we might start to grow potash to the size of our iron ore business today.”

Mackenzie said BHP will continue its restructuring effort. It is looking for an opportunity to sell its shale gas business, which has seen its profitability deteriorate, to focus more on potash, potentially bringing it into line with the company’s dominant iron ore business which reaps over $9 billion a year.

“It’s taken us 50 years to create today’s iron ore business. It will be another 50 years to create a potash equivalent. So you have to start somewhere,” Mackenzie said.

Potash is a mineral from which potassium, an important input in fertilizers, is derived. BHP holds a concession via its Jansen development in Canada, a country which produces 25% of the world’s potash.

The Anglo-Australian miner may spend $4.7 billion developing the Jansen mine, which would be the company’s biggest single investment ever, excluding acquisitions. It will make a final decision as early as June 2018, after assessing market trends, Mackenzie said.

For the rest of this article, click here: