BHP boosts Jansen potash capex to $6.9bn, takes $2.3bn write-down
BHP•BHP has increased stage two Jansen potash capex forecast to $6.9bn from $4.9bn, delaying production to late FY31 and booking a $2.3bn impairment. The project is 16% complete with an 11% IRR, eight-year payback and expected unit costs of $114–130/t.
1. Stage Two Capex Increase and Schedule Delay
BHP has raised the total investment estimate for Jansen stage two to $6.9bn, up from the prior $4.9bn allocated at project approval. Approval was initially granted in October 2023, and production is now expected to begin late in fiscal 2031, two years later than planned.
2. Project Progress and Economics
As of May 2026, stage two is 16% complete, with engineering 83% finished. BHP still forecasts output at 4.36 mtpa for stage two and, with a two-year ramp-up, combined Jansen production of 8.5 mtpa. The internal rate of return remains around 11% with an eight-year payback, and unit operating costs are projected at $114–130/t.
3. Impairment and Market Reaction
The company expects to record a $2.3bn impairment on its Jansen investment in 2026, reflecting higher construction hours, material costs and schedule overruns. Shares fell roughly 5.6% on the day of the announcement, marking the steepest one-day decline in 14 months.
4. Outlook and Guidance
BHP maintains its group capex guidance of approximately $11bn for FY27 and emphasises Jansen’s role in its long-term growth strategy. Stage one remains on track for mid-2027 first production under the updated schedule, supporting future exposure to potash markets.
