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The Financial Post reported that BMO analysts are saying that BHP’s plans to build what will likely be the biggest potash project in the world, are ill-advised, and would be better off focusing on shareholder returns.
The Financial Post reported that BMO analysts are saying that BHP’s plans to build what will likely be the biggest potash project in the world, are ill-advised, and would be better off focusing on shareholder returns.
As quoted in the market report:
Put simply, they think that the economics of Jansen are not attractive. Using a potash price of US$450 a tonne (just below current levels), they projected an internal rate of return (IRR) for Jansen of just 10%. To get to a more reasonable IRR of 12% to 15%, they calculated that a “lofty” long-term price of at least US$600 would be required.