BHP Group has announced a delay and a potential cost overrun of up to $1.7bn (A$2.61bn) at its Jansen potash project in Canada.
This comes as the miner reported “record” copper and iron ore production for fiscal year 2025 (FY25).
The Jansen project is crucial to BHP's strategy to diversify its portfolio, with more than a decade invested in its development.
The Australia-based mining giant now expects the first stage of the Jansen project to cost between $7bn and $7.4bn, a substantial increase from the initial $5.7bn estimate.
BHP attributes the rise to escalated costs, design and scope modifications, and lower than expected productivity.
Additionally, the miner has delayed first production to mid-2027, a setback compared with the earlier target of 2026.
It is also contemplating a two-year postponement for the second stage of the Jansen project, moving the target to FY31.
This decision aligns with the expectation of additional potash supply entering the market in the medium term.
In a statement, the company said: "Given potential for additional potash supply coming to the market in the medium term, and as part of our regular review of the sequencing of capital projects under the capital allocation framework, we are considering a two-year extension for the execution of Jansen Stage 2."
Despite the challenges at Jansen, BHP highlighted its strong operational performance, with a “record” copper output of more than two million tonnes (mt) in FY25.
However, the company forecasts a decrease in production in FY26 to between 1.8mt and 2mt due to anticipated lower grades at the Escondida mine in Chile.
Iron ore production also reached a new high, with BHP's Western Australia operations producing 290mt for the year.
In another move, BHP revealed it is evaluating the potential sale of its Western Australia Nickel assets.
These assets were placed into temporary suspension late last year amid oversupply in the global nickel market and a sharp plunge in forward consensus nickel prices.
The company plans to review the suspension in February 2027.
Meanwhile, last month, BHP announced it will collaborate with XCMG Mining Equipment to deliver fleet solutions across its operations worldwide.
