The Anglo-Australian giant last week announced it would invest $ 2.6bn (£1.7bn) in a Canadian potash project, saying the longer-term outlook for the industrial fertiliser component was “compelling”.
The investment in the Jansen Potash site in Canada came as BHP announced a drop in revenue and profits for the year to June. Pre-tax profits were down from $ 23bn to $ 17.9bn, due in part to a slump in prices of its traditional commodities including iron ore.
“We’re building this company’s future on four, possibly five pillars: iron ore, coal, petroleum and copper and we’ve started to talk about potash,” Mackenzie said yesterday.
Mr Mackenzie said more of the company’s growth capital was likely to go towards petroleum, copper and potash. “We’ll see how we go with iron ore, but we’re probably finished for a time investing in coal,” he said. The Jansen investment will allow the company to finish work on excavating and lining production shafts at the site. It is seen as underscoring BHP’s efforts to diversify its portfolio as the Asia-driven mining boom slows.
Mr Mackenzie said BHP would “take our time about pushing the button on the development of a major mine”, but the company has said Jansen is the world’s best undeveloped greenfield potash site.
He said developing it would “absolutely reflect our ability to afford it, but more importantly, the ability to earn very strong returns for our shareholders.”
He added: “We are continuing on this investment because we strongly believe … this is going to offer very high returns to our shareholders in decades to come.”