Ottawa backs $400-million tech investment in BHP Saskatchewan mine

Open this photo in gallery:

The federal government has committed $100-million to BHP Group Ltd.’s planned $400-million investment in technology designed to make its Jansen project in Saskatchewan the world’s greenest potash mine.

Two cabinet ministers – François-Philippe Champagne, Minister of Innovation, Science and Industry, and Marie-Claude Bibeau, Minister of Agriculture and Agri-Food – were in Saskatoon on Monday with BHP chief executive Mike Henry to announce the initiative. BHP is budgeting a total of $7.5-billion on the first stage of what will become the world’s largest potash mine. Mr. Henry called the project “a vote of confidence in Canada.”

BHP, backed by the government, is investing in technology such as electric underground mining equipment – rather than traditional diesel-powered gear. Government funding will also help pay for automation and technology that reduces water use and greenhouse gas emissions. Over a breakfast meeting on Monday, Prime Minister Justin Trudeau called the BHP team to express support for the project.

The Jansen mine is expected to begin producing potash in 2026. BHP forecasts its technology investments will cut the facility’s greenhouse gas emissions in half compared with comparable existing potash mines, and lower water consumption by 60 per cent against peers.

“BHP is the poster child for environmentally-friendly mining,” Mr. Champagne said in an interview. He said the government is in talks with other miners, including Rio Tinto Group on similar investments. He said: “We want Canada to be the green supplier of choice, as a producer of green steel, green aluminum and green batteries, along with green potash.”

Jansen, located 140 kilometres east of Saskatoon, is the first new underground potash mine built in Canada in 50 years. It is the single largest project ever undertaken by Melbourne, Australia-based BHP, and the company’s first potash mine.

BHP predicts demand for potash will increase in coming decades, owing to the need for fertilizer that feeds increasingly affluent consumers from less arable land. Ms. Bibeau said: “Our government’s investment in the world’s greenest potash mining facility will help our farmers feed a growing world population.”

Over the past year, BHP exited oil and gas – spinning out the business in a US$20-billion transaction – and announced plans to sell mines that produce coal for energy. Mr. Henry described strategy as “a pivot to future-facing commodities.” Along with potash, BHP is a major producer of copper, iron ore and metallurgical coal, which is used in steel making.

Mr. Champagne said providing subsidies to companies such as BHP is a cost of doing business and remaining competitive for new projects. He said every industrial nation features government programs that support innovation and transitioning to a green economy.

“We never win projects based entirely on money. We win based on our strength across the board, on talent, on stability,” Mr. Champagne said, pointing to a string of recent investments in Canada by foreign automakers and battery manufacturers. He said: “Canada is on an a roll.”

The first stage of the Jansen mine will employ 600 – Mr. Henry said 20 per cent of the work force will in Indigenous – and the project has a lifespan of at least 50 years.

Based on the size of the potash reserves, BHP forecast there could be four stages of development over the next 15 years. Mr. Champagne pushed the mining company to move quicker on the expansion. He said: “Let’s seize the moment. Let’s be ambitious.”

Along with Saskatchewan, Russia and Belarus have the world’s largest known potash reserves. Russia’s invasion of Ukraine prompted some countries to boycott exports from those two nations and pushed up potash prices. Looking ahead, Mr. Henry said Russia and Belarus may struggle to access the capital they need to develop new potash properties, while Saskatchewan will continue to be an attractive jurisdiction for miners.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.