BHP takes $2.3bn hit on Jansen potash

BHP Group will recognise an impairment charge of about US$2.3 billion on its Jansen potash project, following a review of the Canadian development. The writedown reflects rising costs and schedule changes on the multi-stage project, which is one of the company’s largest growth initiatives.

The impairment comes as BHP updates capital estimates and timelines for both Stage 1 and Stage 2 of Jansen. The adjustments mark the latest in a series of cost and time revisions to the potash investment.

As a result of the review, BHP has revised the investment estimate for Jansen Stage 2 to US$6.9 billion, up from US$4.9 billion. The company now expects first production from Stage 2 toward the end of fiscal 2031, indicating a later start-up than previously planned.

At the end of May 2026, Stage 2 was approximately 16% complete, with engineering about 83% complete. These metrics illustrate that much of the design work has been finished while physical execution is still at an early phase.

The latest cost increase for Stage 2 adds to earlier overruns on the broader Jansen development. The project has experienced repeated upward revisions to expenditure as detailed planning and construction progress.

BHP now estimates the cost of Jansen Stage 1 at US$8.4 billion. Despite the higher figure, Stage 1 remains on track to begin production in mid-2027.

The first stage is expected to deliver initial potash volumes that will ramp up over time, ahead of the later Stage 2 contribution. Maintaining the start-up schedule for Stage 1 anchors the near- to medium-term production outlook for the asset.

Once both stages of Jansen are fully ramped up, BHP expects combined output to reach about 8.5 million tonnes per annum. This volume would represent roughly 10% of total global potash production, underscoring the scale of the project in the global fertilizer market.

Despite the impairment and cost increases, BHP said it will maintain group capital expenditure guidance for fiscal 2027 at approximately US$11 billion. Keeping this target suggests the company expects to accommodate Jansen’s higher costs within its broader investment program.

The impairment charge and revised cost profile will feed into BHP’s 2026 financial reporting, as the company reassesses the carrying value of the Jansen asset base. Investors will be watching how the updated assumptions influence future returns from the project.