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TORONTO — Australian mining giant BHP said on Tuesday it will go ahead with a plan to spend $6.4 billion to build the second stage of its Jansen potash mine east of Saskatoon.

The approval of stage two of the project is the next step in BHP's ongoing development of what will be the largest potash mine in the world, once complete.

The first stage, which is already under construction, is about a third of the way finished, with an anticipated start date of 2026. The second stage is expected to involve six years of construction, with first production in 2029 followed by a three-year ramp-up period. 

Stage two of the project is expected to double production capacity at Jansen to approximately 8.5 million tonnes per annum, increasing Canada’s production of the critical mineral and supporting Canada’s position as one of the world’s top potash producers.

Prior to Tuesday's announcement, BHP had already approved $12.4 billion in investments for the Jansen project, making it the largest mining investment in Saskatchewan's history.

“The approval of Jansen stage two is an exciting next step in our growth plans for Canada that reinforces our confidence in potash, and our optimism in Canada as an investment destination," said Ragnar Udd, BHP's president for the Americas, in a news release.

Longer term, the mine will have the potential for two additional expansions to reach an ultimate production capacity of 16 to 17 million tonnes per annum.

Potash is used to make fertilizer, and demand is expected in grow for decades to come as the world's population increases and access to arable land decreases.

Saskatchewan is the largest potash producer in the world and the sole producer inCanada, typically accounting for about 30 per cent of global potash production.

The world's largest fertilizer maker, Canadian company Nutrien Inc., operates six potash mines in Saskatchewan. Nutrien was created through the merger of Agrium Inc. and Potash Corp. of Saskatchewan in 2018.

In 2010, BHP launched a hostile takeover bid for Potash Corp., but the proposed merger was ultimately blocked by the federal government.

The second stage of the project is expected to create more than 2,000 construction jobs and more than 300 full-time Saskatchewan-based jobs once production begins. 

This report by The Canadian Press was first published Oct. 31, 2023.

Amanda Stephenson, The Canadian Press