Latest news with #Jansen
Business Times
2 days ago
- Business
- Business Times
BHP delays Jansen potash project as costs surge; logs record copper output
[BENGALURU] BHP Group flagged delays and cost overruns of about 30 per cent for its key Jansen Stage 1 potash project on Friday (Jul 18), even as the miner reported record annual copper production above two million metric tonnes (Mt) and warned of a decline next year. The cost blowouts that could be up to US$1.7 billion represents a significant setback for BHP, which had accelerated potash production following Russia's invasion of Ukraine, anticipating higher fertiliser prices due to supply disruptions from sanctioned Russian and Belarusian producers. The world's largest listed miner has spent more than a decade trying to break into the potash market as part of its diversification strategy. BHP attributed the cost blowouts to design and scope changes, inflationary pressures, and lower-than-expected productivity during construction. BHP said first production from its Jansen Stage 1 potash project in Canada has been pushed back to mid-2027 from the previously targeted end-2026, while capital expenditure estimates have surged to US$7.0 billion to US$7.4 billion from US$5.7 billion. Adding to the project's challenges, BHP is considering delaying the second stage of Jansen by two years due to concerns about potential oversupply in the global potash market. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up '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,' the company said. BHP committed US$4.9 billion towards Jansen's second stage development in October 2023, with first production scheduled before June 2029. The company said it had spent only US$400 million of the committed funds for the second phase. The miner reported copper production of 2.02 Mt for fiscal 2025, at the upper end of its forecast range. However, it said it expects output to drop to between 1.8 Mt and 2.0 Mt in fiscal 2026, reflecting planned lower grades at its flagship Escondida mine in Chile. Shares of the company rose 2.9 per cent to A$40.26 by 0144 GMT, outperforming a 1.6 per cent jump in the mining sub-index. BHP logged record annual iron ore production of 290 Mt, at the upper end of its guidance, while its fourth-quarter output of 77.5 Mt beat consensus estimates. BHP is also assessing a potential divestment of its Western Australia Nickel assets as part of a review, citing balance sheet impacts from the nickel business. REUTERS
Reuters
2 days ago
- Business
- Reuters
BHP delays Jansen potash project as costs surge; logs record copper output
July 18 (Reuters) - BHP Group ( opens new tab flagged delays and cost overruns of about 30% for its key Jansen Stage 1 potash project on Friday, even as the miner reported record annual copper production above 2 million metric tons and warned of a decline next year. The cost blowouts that could be up to $1.7 billion represents a significant setback for BHP, which had accelerated potash production following Russia's invasion of Ukraine, anticipating higher fertiliser prices due to supply disruptions from sanctioned Russian and Belarusian producers. The world's largest listed miner has spent more than a decade trying to break into the potash market as part of its diversification strategy. BHP attributed the cost blowouts to design and scope changes, inflationary pressures, and lower-than-expected productivity during construction. BHP said first production from its Jansen Stage 1 potash project in Canada has been pushed back to mid-2027 from the previously targeted end-2026, while capital expenditure estimates have surged to $7.0 billion-$7.4 billion from $5.7 billion. Adding to the project's challenges, BHP is considering delaying the second stage of Jansen by two years due to concerns about potential oversupply in the global potash market. "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," the company said in a statement. BHP committed $4.9 billion towards Jansen's second stage development in October 2023, with first production scheduled before June 2029. The company said it had spent only $400 million of the committed funds for the second phase. The miner reported copper production of 2.02 Mt for fiscal 2025, at the upper end of its forecast range. However, it said it expects output to drop to between 1.8 Mt and 2.0 Mt in fiscal 2026, reflecting planned lower grades at its flagship Escondida mine in Chile. Shares of the company rose 2.9% to A$40.26 by 0144 GMT, outperforming a 1.6% jump in the mining sub-index (.AXMM), opens new tab. BHP logged record annual iron ore production of 290 Mt, at the upper end of its guidance, while its fourth-quarter output of 77.5 Mt beat consensus estimates. BHP is also assessing a potential divestment of its Western Australia Nickel assets as part of a review, citing balance sheet impacts from the nickel business.
New Straits Times
2 days ago
- Business
- New Straits Times
BHP delays Jansen potash project as costs surge; logs record copper output
KUALA LUMPUR: BHP Group flagged delays and cost overruns of about 30 per cent for its key Jansen Stage 1 potash project on Friday, even as the miner reported record annual copper production above 2 million metric tons and warned of a decline next year. The cost blowouts that could be up to US$1.7 billion represents a significant setback for BHP, which had accelerated potash production following Russia's invasion of Ukraine, anticipating higher fertiliser prices due to supply disruptions from sanctioned Russian and Belarusian producers. The world's largest listed miner has spent more than a decade trying to break into the potash market as part of its diversification strategy. BHP attributed the cost blowouts to design and scope changes, inflationary pressures, and lower-than-expected productivity during construction. BHP said first production from its Jansen Stage 1 potash project in Canada has been pushed back to mid-2027 from the previously targeted end-2026, while capital expenditure estimates have surged to US$7 billion-US$7.4 billion from US$5.7 billion. Adding to the project's challenges, BHP is considering delaying the second stage of Jansen by two years due to concerns about potential oversupply in the global potash market. "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," the company said in a statement. BHP committed US$4.9 billion towards Jansen's second stage development in October 2023, with first production scheduled before June 2029. The company said it had spent only US$400 million of the committed funds for the second phase. The miner reported copper production of 2.02 Mt for fiscal 2025, at the upper end of its forecast range. However, it said it expects output to drop to between 1.8 Mt and 2.0 Mt in fiscal 2026, reflecting planned lower grades at its flagship Escondida mine in Chile. Shares of the company rose 2.9 per cent to A$40.26 by 0144 GMT, outperforming a 1.6% jump in the mining sub-index. BHP logged record annual iron ore production of 290 Mt, at the upper end of its guidance, while its fourth-quarter output of 77.5 Mt beat consensus estimates. BHP is also assessing a potential divestment of its Western Australia Nickel assets as part of a review, citing balance sheet impacts from the nickel business.
Reuters
2 days ago
- Business
- Reuters
BHP logs record copper output but flags Jansen delay and cost blowout
July 18 (Reuters) - BHP ( opens new tab reported on Friday annual copper production above 2 million metric tonnes for the first time but warned of lower output next year while separately flagging delays and cost blowouts of up to 29% for its key Jansen Stage 1 potash project. The world's largest listed miner achieved copper production of 2.02 Mt in fiscal 2025, at the upper end of its forecast range. However, it expects output to drop to between 1.8 Mt and 2.0 Mt in fiscal 2026, reflecting planned lower grades at its flagship Escondida mine in Chile. BHP also reported record annual iron ore production of 290 Mt, at the upper end of its guidance, while its fourth-quarter output of 77.5 Mt beat a Visible Alpha consensus estimate of 75.90 Mt. The miner said first production from its Jansen Stage 1 potash project in Canada has been pushed back to mid-2027 from the previously targeted end-2026, while capital expenditure estimates have surged to $7.0 billion-$7.4 billion from $5.7 billion - a cost increase of up to 29%. "The estimated cost increase is driven by inflationary and real cost escalation pressures, design development and scope changes, and our current assessment of lower productivity outcomes over the construction period," BHP said in a statement. Strong iron ore production in the June quarter helped offset a weak March quarter that was impacted by two tropical cyclones. BHP had undergone a debottlenecking exercise at its Pilbara operations after ramping up the South Flank mine last year. For fiscal 2026, BHP expects iron ore production between 284 Mt and 296 Mt. The company is also assessing a potential divestment of its Western Australia Nickel assets as part of an ongoing review, citing balance sheet impacts from the nickel business. "Any decision to divest will be subject to an assessment against other options, including continuing temporary suspension, restart or closure," it said.
CNBC
6 days ago
- Business
- CNBC
In middle of Trump's trade war, importers hold more cash and move inventory off the books
President Trump's trade war is leading importers to hold more cash and less inventory on their books as they seek to manage a series of tariff increases, additional threats from Trump, and temporary pauses. Among both U.S. and global firms, use of supply chain financing programs that allow importers to stretch out payment terms is up, according to Wells Fargo data, anywhere from 5%-10%. "Cash is good to have," said Jeremey Jansen, managing director, head of global supply chain and trade sales at Wells Fargo. "There is a lot of uncertainty, and if you are a distributor or manufacturer, there is a ton of pressure to push out payment terms," he said. Delays in the implementation of tariffs, set to expire by August if trade deals are not reached, have played a significant role in the management of inventory and cash in recent months. From large retailers to auto parts stores and manufacturers, buyers of both finished goods and raw materials, tariff pauses allowed importers to bring in more inventory. But once the inventory arrives, it may be bound for financing rather than straight to market. After an order has been shipped, an invoice is generated. Once that invoice is generated, an importer sends it to the bank where they maintain a supply chain financing program, and the bank pays the supplier. The importer than repays the bank under a timeline negotiated with the bank. "We are putting money right in the middle of that supply chain," Jansen said. While the retail sector has traditionally been a client for this type of financing, Jansen said health care firms are a new source of interest as President Trump threatens targeted tariffs on the sector's overseas supply chains. "We are seeing a significant level of interest in supply chain finance from the health care space," Jansen said. "It can be drug companies, distributors, and pharmacy benefit managers. This industry does a lot of overseas manufacturing, and there is a significant amount of uncertainty regarding tariffs," he added. Supply chain financing for Chinese-made goods was steady rather than rising in June, according to Jansen, due to the fact that companies had front-loaded significant inventory in the first quarter of the year. With the latest round of tariffs on Asian nations announced last week and the recent deal with Vietnam that sent tariffs higher on its goods, Jansen said the bank is monitoring supply chain financing for orders out of countries including Vietnam, South Korea, Malaysia, Thailand, and Indonesia. Companies that are bringing in goods under a higher tariff can move that inventory off their books by having a third party, such as a bank, pay for the inventory, making the third party the beneficial cargo owner, storing the goods on the importer's behalf. The importer then pays the third party for the product and storage on an agreed timeline. "There's an increase in importer interest in financing the inventory on their books," said Jonathan Heuser, head of trade & supply chain finance for Citizens Bank. "With large multinationals potentially holding more inventory, they are interested in ways to unlock working capital associated with that inventory," he added. Josh Allen, COO of ITS Logistics, says the process of pushing inventory off the balance sheet — often referred to as "vendor management inventory" — is also a common practice in the automotive industry and construction industries. "It frees up the importer's cash flow, and the third-party owner makes money through the storage and sale back to the importer. It's a win-win for strategic partners," Allen said. After what had been a dramatic decline in business with Asian countries earlier in the year amid Trump's tariff threats, there has been some recovery in recent months during tariff pauses, according to Heuser. "For China, this recovery has been muted, and volumes are still quite depressed. With India and Vietnam, the recovery has been stronger, and continues to build back," he said. The trade activity has been uneven across sectors, Heuser said, with agricultural product shipments as one example that has performed better than manufactured products or chemicals. That has become an opportunity for companies that have the ability to source outside of the U.S., for example, supplying Chinese buyers with the same commodity but sourcing it from a non-U.S. jurisdiction. But those shifts within the supply chain come with an overall environment which remains cautious, according to Heuser. "Clients are remaining cautious and waiting for some measure of stabilization before taking significant actions or making meaningful changes to supply chains," he said. Lending activity, for example, which can often be an indicator of investment and growth plans, remains muted, he added.
