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JR__Ewingon May 24, 2013 7:22am
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BHP's Jansen potash put in doubt
BHP's Jansen potash put in doubt BHP's expansion projects put in doubt
Speculation about BHP Billiton Ltd's plans for the last remaining expansion projects in its investment pipeline has been sparked by comments this week that cast doubt on whether the miner will proceed with the investments.
Plans for the projects in question — the $US12 billion ($A12.44 billion) Jansen potash project in Canada and the mega-pot at the Cannington silver and base metals mine in northwest Queensland that would expand the life of the mine — have remained clouded as the miner seeks to rein in costs and hold capital expenditures.
BHP's recently-appointed chief executive Andrew Mackenzie told investors this week that BHP planned to go ahead with plans to cut capital expenditures from $US22 billion in 2013 to $US18 billion in 2014, and to $US15 billion in the two to three subsequent years, The Australian reported.
He added that Jansen's approved expenditure will run out in the next few months and would need to be “refreshed” for any further work to take place, raising questions about whether the miner would approve new spending to allow the project to proceed.
Analysts took Mr Mackenzie's comments to suggest the potash project could be shelved.
“While BHP wants to retain it as an option, we felt the shelving of the project is imminent, consistent with reducing capex,” JP Morgan analysts wrote in a note to clients, according to The Australian.
However, UBS analysts who also attended the meeting, were less certain that Mr Mackenzie's comments meant the project was any more likely to be shelved.
https://www.businessspectator.com.au/news/2013/5/24/resources-and-energy/doubts-rise-over-bhp-projects-report