BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs(BHP.US) Jason Potash Mine provisioned a $2.3 billion impairment: the second phase expansion cost soared to $6.9 billion, expected to start production by the end of 2031.

Notice that the global mining giant BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs (BHP.US) will make a $2.3 billion asset impairment provision for its massive Jansen potash project, following a series of recent cost overruns and delays in the construction of the Canadian expansion project. As the world's largest mining company, BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs has frequently exceeded cost estimates on this controversial project. Following an assessment, the company announced on Thursday that the cost of the second phase of the expansion project is now expected to reach $6.9 billion, higher than the previously forecasted $4.9 billion. The project is expected to begin production by the end of 2031. After the Russia-Ukraine conflict led to a surge in fertilizer prices, BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs decided in 2023 to proceed with the expansion of the Jansen project, even though the first phase of the mine was still years away from production. Since then, fertilizer prices have declined, and the costs of both phases of the project have been sharply rising. The project has long been overlooked by some investors. After years of debate over massive capital investment, BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs finally approved the construction of the Jansen potash mine in Saskatchewan in 2021. The mine's operating life could span a century, and it is seen by BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs as a business comparable in scale to their benchmark iron ore project in Australia. The first production of the Jansen project's first phase is expected to begin next year. Fertilizer Prices Experience Roller Coaster Since the outbreak of the Russia-Ukraine conflict in 2022, the global fertilizer market has experienced a severe roller coaster ride. This conflict not only directly impacted the supply of fertilizers from Russia and Belarus two major fertilizer export giants, but also led to a surge in global fertilizer prices in 2022 due to the skyrocketing natural gas prices (natural gas accounts for 80% to 90% of the cost of synthesizing ammonia for nitrogen fertilizers). For example, the average price of potash (MOP) in 2022 soared to $923 per ton. Between 2023 and 2025, as geopolitical tensions from the GEO Group Inc were gradually digested by the market, and with the easing of sanctions on Belarus and increased exports from Canada and other countries, the global fertilizer supply chain was restructured, leading to a sharp decline in prices for two consecutive years. By 2025, the global fertilizer market had mostly returned to normal, with the spot price of potash fluctuating between $360 and $390 per ton. Mining giants like BHP Group Ltd Sponsored American Depositary Receipt Repr 2 Shs had to impair assets for their potash projects due to the sharp decline in fertilizer prices. However, in 2026, the fertilizer market underwent another major change. As a result of escalating conflicts in the Middle East and the temporary closure of the Strait of Hormuz (a critical chokepoint for global fertilizer trade), the supply chain once again faced shortages. The World Bank's latest report in 2026 shows that the global fertilizer price index surged over 12% in the first quarter of this year, with the World Bank predicting that fertilizer prices will rise by more than 30% for the full year. This spring, urea prices surged by 46% month-on-month to over $725 per ton, reaching a new high in four years. While current fertilizer prices have cooled off from the extreme peak in 2022, the political risks posed by the GEO Group Inc have triggered a second wave of rebounds, posing the most severe cost challenges to global agriculture since 2022.