Miner BHP Billiton mapped out a cautious approach to expanding into potash, keeping a USUS$14 billion Canadian project alive but delaying production at the giant deposit until at least 2020.
In its first set of results under new chief executive Andrew Mackenzie, BHP outlined its plan to keep options open alongside a 15 per cent drop in half-year profit. The world’s largest miner missed forecasts largely due to Australian mining tax adjustments and other non-operational items.
BHP and Glencore Xstrata wrapped up the results season for the world’s big five miners, with BHP holding up slightly better than its peers as it stepped up output of iron ore, copper, coal and oil and slashed US$2.7 billion in costs in the face of sliding commodity prices.
Major miners have come under pressure to rein in spending, sell off underperforming assets and tackle debt after years of rampant spending on new mines and acquisitions as prices rose.
Reflecting the sector-wide austerity drive, BHP said it plans to invest US$2.6 billion over the next four years digging shafts at the Jansen potash project in Canada to keep its options open, delaying production by at least five years while inviting offers for stakes in the mine.
Mackenzie said he wanted to retain flexibility to enter the market a time that was right for shareholders.
