Melbourne, June 19, 2026, 02:05 (AEST)
- BHP shares in London finished down 4.4% at 3,327 pence after the Jansen update.
- BHP said Stage 2 costs climbed to US$6.9 billion, up from US$4.9 billion. The company is expecting to record a US$2.3 billion impairment charge.
- BHP finished Thursday at A$65.04 in Sydney trade, with the ASX listing set for its first full session to react on Friday after the announcement came out.
BHP Group lifted the budget for Stage 2 of its Jansen potash project in Canada, adding US$2 billion and announcing a US$2.3 billion impairment, cutting the value listed on its balance sheet. The cost move came after Sydney closed and triggered a bigger reaction in London.
BHP’s Jansen project faces a fresh setback just days before Brandon Craig is set to take over as CEO from Mike Henry on July 1. The potash mine is key to BHP’s push for earnings beyond iron ore and copper, but the latest cost overrun puts more pressure on Craig’s start.
BHP finished Thursday off 0.84% at A$65.04 before the news hit. The S&P/ASX 200 slipped 0.62% to 8,911.1. Rio Tinto was down 2.04% and Fortescue lost 1.72%. That suggests BHP’s local drop was part of the wider mining selloff, not a reaction to the Jansen announcement.
Stage 2 reached 16% completion by the end of May. Engineering on the project is now 83% done. BHP still aims for first production by late fiscal 2031. Both stages together are set to deliver 8.5 million tonnes a year, or around 10% of total global potash. Craig described Jansen as “an important pillar of BHP’s strategy” and a “low cost, long life asset.”
BHP is now calling for an 11% internal rate of return for Stage 2, putting the annual return on invested capital at that level. The company still sees an eight-year payback period. BHP continues to forecast an EBITDA margin above 65%. EBITDA refers to operating profit before interest, tax, depreciation and amortisation.
The market seems more worried about whether BHP can deliver on its plans than about near-term funding trouble. BHP left its group capital spending target for fiscal 2027 unchanged at about US$11 billion. Still, investors are punishing a project that’s faced a series of cost overruns and delays with a sharper discount.
BHP is looking at capital recycling as a way to offset pressures. The miner is getting ready to sell about US$1.5 billion in power transmission assets connected to its copper operations in Chile, Diario Financiero said Wednesday. BHP declined to comment on the report.
The risks go beyond a non-cash writedown. Higher inflation, more design tweaks or slow progress on construction could mean BHP needs to redo Jansen’s numbers again, and if potash prices dip, that 11% return gets shakier. At Port Hedland, workers have backed strike action, putting a different short-term threat in play at BHP’s iron-ore export hub.
ASX trades as normal on Friday, putting focus on the opening auction for signs of Australian shareholder reaction to the reset. BHP’s full-year production review lands July 16, the next scheduled operating update.
