CANBERA (dpa-AFX) - Shares of BHP Group Ltd. (BHP, BLT.L, BHP.AX, BHP.L) were losing around 5 percent in Australian trading after the mining giant announced that it plans to record around $2.3 billion impairment charge in relation to its investment to date in the Jansen potash project.
In a statement, BHP confirmed that the total investment estimate for Stage 2 of the Jansen potash project will increase to $6.9 billion from initial investment cost estimate of $4.9 billion when it was approved in 2023, including contingencies. The first production is now estimated in late fiscal 2031.
In August 2025, BHP announced a two-year extension of Jansen Stage 2, shifting first production from fiscal 2029 to fiscal 2031.
With the planned two-year extension, BHP noted that majority of the cost increase for Jansen Stage 2 is from additional construction hours and quantities of materials to complete Stage 2 and escalation, identified as part of the comprehensive review.
At the end of May 2026, Jansen Stage 2 is 16 percent complete with engineering at 83 percent complete, de-risking the estimate for remaining work.
BHP said it continues to expect Jansen Stage 2 to deliver around 4.36 million tonnes per annum or Mtpa of production. Following an expected two-year ramp-up period from first production, combined output from Jansen is expected to be 8.5 Mtpa. The firm will deliver approximately 10 percent of total global potash production.
The company added that underlying EBITDA margins for Jansen Stage 2 remain above 65 percent due to its low cost position.
Jansen Stage 1's first production remains on track for mid calendar year 2027.
BHP expects its Group capital expenditure guidance for fiscal 2027 to remain at approximately $11 billion.
BHP President Americas and CEO-elect, Brandon Craig said, 'BHP continues to invest in its long-term growth strategy. Jansen is an important pillar of BHP's strategy and will deliver exposure to a future facing commodity with strong demand fundamentals and portfolio diversification benefits. With the reset of Jansen Stage 2, we are progressing with our intention of building a Tier 1 asset.'
In Australia, BHP shares were trading at A$61.86, down 4.90 percent.
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