Commodities major BHP on Friday warned of rising costs and possible delays at its flagship Canadian potash project and confirmed it is considering selling its suspended nickel business, as part of a strategic review amid mixed production results across its commodities portfolio.

The world’s largest miner said capital expenditure (capex) for Jansen Stage 1 is now expected to reach between $7.0-billion and $7.4-billion, up from a previous $5.7-billion estimate. First production from the Saskatchewan-based mine may revert to its original mid-2027 timeline.

BHP cited “inflationary and real cost escalation pressures, design development and scope changes, and our current assessment of lower productivity outcomes over the construction period”.

Jansen Stage 1 is now 68% complete. The company has spent $4.5-billion on the project so far. A decision on the timing and final capex estimate is expected in the second half the 2026 financial year.

Meanwhile, the miner’s second-phase expansion at Jansen, known as Stage 2, could face a two-year delay to the 2031 financial year. The company said this reflected capital sequencing under its allocation framework and uncertainty about additional potash supply coming to market. Further updates on timing and costs were also expected in the 2026 financial year.

BHP also confirmed it is weighing options for its Western Australia Nickel assets, which had been in temporary suspension since early 2025. The review included a possible divestment, restart or closure of the business. A decision was expected by February 2027.

“During the review process, BHP is committed to: support the workforce with a people first approach; ensure the ongoing safety and integrity of the mines and related infrastructure; work closely with Traditional Owners, governments and suppliers, and to invest in local communities via the A$20-million Community Fund established in 2024; and invest in exploration to extend the resource life of WAN and preserve optionality,” the company said.

MIXED PERFORMANCE

Despite headwinds in potash and nickel, BHP posted record copper and iron-ore output for the year ended June 30, 2025.

“BHP delivered record iron-ore and copper production, which demonstrates the strength and resilience of our business and underpins our ability to deliver growth and returns to shareholders amid global volatility and uncertainty,” commented CEO Mike Henry.

Copper production rose 8% to 2.02-million tonnes, its third consecutive yearly increase and the highest on record, driven by a standout performance at Chile’s Escondida mine. Production at Escondida surged 16% to 1.31-million tonnes, supported by record concentrator throughput and improved grades.

“Escondida achieved its highest production in 17 years, increasing 16% due to record concentrator throughput, improved recoveries, higher concentrator feed grade of 1.02% . . . and the Full SaL leaching project which achieved first production in the fourth quarter of the 2025 finacial year.”

At South Australia, output edged down 2% to 316 000 t, as a weather-related power outage in the second quarter offset strong performance in the second half. Pampa Norte was flat at 268 000 t, while Antamina output fell 17% to 119 000 t.

The 2026 copper guidance stands at 1.8-million to 2.0-million tonnes, down from the 2025 financial year owing to expected lower grades in Chile.

Iron-ore production rose 1% to 263-million tons, a new record. The Western Australia Iron Ore (WAIO) division delivered 257-million tonnes, with record shipments and strong performance at South Flank, which exceeded nameplate capacity in its first full year.

“The efficiency of our infrastructure hubs continues to strengthen performance with rail, port and technology investments delivering tangible production outcomes,” said Henry.

The record WAIO production was delivered despite the impact of Tropical Cyclone Zelia and Tropical Storm Sean in the third quarter, and the planned increase in tie-in activity of the multi-year Rail Technology Programme (RTP1).

Production for the 2026 financial year is expected to be between 251-million tonnes and 262-million tonnes, or 284-million to 296-million tonnes on a 100% basis, incorporating the planned rebuild of Car Dumper 3 in 2026 and the ongoing tie-in activities for RTP1.

Steelmaking coal production dropped 19% to 18-million tonnes, hit by wet weather and mine challenges, while energy coal fell 2% to 15-million tonnes, despite exceeding guidance. Coal output is expected to rise in the 2026 financial year as inventory builds continue.

Commenting on commodity markets, Henry said that global demand had remained resilient so far in 2025. “That resilience largely reflects China’s ongoing ability to grow its overall export base despite a significant decline in exports to the US, and its ability to deliver robust domestic demand despite the dislocation in the property sector.”

“Copper and steel demand have benefited from a sharp acceleration in renewable energy investment, electricity grid build-out, strong machinery exports and electric vehicle sales. While slower economic growth and a fragmenting trading system remain potential headwinds, stimulus efforts by China and the US would help to mitigate the near-term impact. Going forward, China’s fifteenth five-year plan is likely to provide more visibility on policies to sustain longer term growth and development.”