Decision could have consequences on whether BHP pushes forward with a massive potash project in Saskatchewan in the coming years
Canadian Mike Henry will be the next chief executive of giant Australian miner BHP Group, a decision that could have consequences on whether it pushes forward with a massive potash project in Saskatchewan in the coming years.
Henry, 53, takes the helm in January, leaving a month or so for him to transition from his current role as head of BHP’s Australian mining operations, where the company’s iron ore mines that account for nearly half its revenue are located.
One item on his eventual to-do list, though not necessarily at the top, will be whether the company will allocate $5 billion to construct the first phase of its Jansen potash project in Saskatchewan. The project would initially add four million tons of potash to the market and as much as four times that over time, which could drastically alter the supply and demand dynamics for existing producers such as Saskatoon-based Nutrien Ltd.
Although BHP has already invested a few billion dollars into Jansen, a decline in potash prices and investor pushback have clouded the project’s future.
“He is unlikely to be as committed to Jansen as (current CEO) Andrew Mackenzie,” Ben Isaacson, a Scotiabank Capital analyst, said in a note on Thursday. “As we’ve stated several times, we believe there are issues regarding execution, costs, returns and the project was initiated during a very different time in the potash market.”
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