BHP Billiton received notice from the Saskatchewan Ministry of Environment in late June 2011 that ministerial approval had been granted to develop the company’s Jansen potash project, located about 140 km east of Saskatoon. The company submitted the Environmental Impact Statement (EIS) for the project in December 2010.
A week prior to announcing approval of the Jansen project EIS, BHP Billiton reported plans to invest a further $488 million to support development of the project during its feasibility study stage. The funding will go toward completion of mine design and engineering, initial surface construction, sinking of the first 350 m of the production and service shafts, and procurement of long-lead-time items. The company anticipates final approval to proceed with the project will be sought from the BHP Billiton board in 2012.
BHP Billiton initiated its Jansen project feasibility study in February 2011. Since that time, the company has constructed the refrigeration center for the ground-freezing process that is required prior to the sinking of the production and service shafts and drilled more than 55,000 m of wells to complete the 89 freeze holes and monitoring wells.
Based on the current development schedule, Jansen is expected to start production in 2015. At design capacity, the project will produce about 8 million mt/y of agricultural grade potash from its 3.37-billion mt in-situ mineral resource over an estimated 70-year mine life.
The Jansen project is expected to employ an average of 1,900 people during construction and to create approximately 1,000 operational jobs once the mine has reached full capacity. BHP Billiton also expects to pay approximately C$90 billion in royalties and taxes to the municipal, provincial and federal governments over the decades in which Jansen operates, an estimate based on the government of Saskatchewan’s published 2014 potash price assumption in its 2010-2011 budget. Approximately 65% of these payments will be in the province of Saskatchewan.
BHP Billiton is also studying other potential projects in the Saskatchewan potash basin and planned to start drilling at its Melville project in July 2011, having already undertaken 2-D and 3-D seismic surveys of the project area. Its Boulder and Young projects also continue to progress, as do other studies in the area. While the full size and potential of these development options have yet to be confirmed, BHP Billiton believes its Saskatchewan potash business could eventually reach a production capacity of more than 16 million mt/y.