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Construction at the Jansen potash mine near Lanigan, Sask. will continue despite heavy losses reported Tuesday by BHP Billiton.
The mining giant posted a loss of $6.4 billion for the 2015-16 fiscal year.
Company spokesman Chris Ryder said a large part of that loss reflects writedowns in the value of assets the company owns, rather than a loss of cash flow.
“We were actually cash flow positive for the fiscal year just ended, we had about $3.4 billion of free cash flow,” he said.
Ryder said the company’s board approved the current phase of construction at Jansen in 2013. He said they’re about 60 per cent of the way through completing about $2.6 billion worth of work, including excavating two mine shafts and getting utilities installed for the site.
Acknowledging potash prices remain stubbornly low, Ryder said the company isn’t expecting to bring the mine into production until sometime in the 2020’s.
“We believe in the long term fundamentals of the potash market and we think that the potash markets are going to require new production after 2020,” he said.
Once completed, the Jansen mine is expected to produce as much as 8 million tonnes of potash per year.
