Not relevant directly to Verde but FYI for FWIW.. After years of delays and billions of dollars spent, Scotiabank Analyst Ben Isaacson said there’s a 90 per cent chance that BHP Group Ltd. finally greenlights the first phase of its Jansen potash project in Saskatchewan within the next several months.
If BHP makes that call, investors may want to get ready to move in on potash stocks, Isaacson said.
“We've seen enough Jansen head fakes over the past decade to surmise potash-levered equities will be down three per cent to seven per cent on headline day. But, we would buy any weakness,” Isaacson wrote in a note to clients on Monday.
He said the Jansen project is not the market disruptor it was initially, considering the global fertilizer market is bigger today compared to when the facility was originally supposed to come online.
Getting the Jansen facility to the finish line has proven to be a struggle for BHP. The project entered its feasibility phase in 2011 with an original target date to start selling potash in 2015. Nearly US$3 billion has been sunk into the Jansen plant and it remains 91 per cent complete.
Isaacson said by the time the Jansen project is in full production, perhaps by the end of the decade, the additional potash mined at the facility will be needed.
He believes BHP will approve the project in its final investment decision because of its CEO's forecast on the global potash market's growth over the long-term, how the investment returns from Phase I aligns with the company’s targets and how prices for the key fertilizer have been surging.
The analyst advises investors against selling their potash-related holdings ahead of BHP’s “imminent” decision because if the company doesn’t approve the project, those stocks will rally.
https://www.bnnbloomberg.ca/bhp-likely-to-approve-long-delayed-jansen-potash-project-scotia-says-1.1595501