BHP announced that it will move ahead with its Jansen Potash project in Saskatchewan, Canada as it approved $5.7 billion in capital expenditure for the Jansen Stage 1 potash project.

The Jansen project is expected to produce about 4.35 Mt/a (4.8 million stpy) of potash and has a basin position with the potential for further expansions. First ore is targeted in the 2027 calendar year, with construction expected to take approximately six years, followed by a ramp up period of two years.

BHP chief executive officer, Mike Henry, said Jansen is aligned with BHP’s strategy of growing the company’s exposure to future facing commodities in world class assets, which are large, low cost and expandable.

“This is an important milestone for BHP and an investment in a new commodity that we believe will create value for shareholders for generations,” Henry said in a statement.

Jansen is located in the world’s best potash basin and is expected to operate up to 100 years. Potash provides BHP with increased leverage to key global mega-trends, including rising population, changing diets, decarbonization and improving environmental stewardship.

“In addition to its merits as a stand-alone project, Jansen also brings with it a series of high returning growth options in an attractive investment jurisdiction. In developing the Jansen project, BHP has had ongoing positive engagement and collaboration with First Nations and local communities, and with the provincial and federal governments. Jansen is designed with a focus on sustainability, including being designed for low GHG emissions and low water consumption.” Henry added.

In other news from the world’s largest mining company, BHP Group reported its best annual profit in nearly a decade on soaring iron ore prices, announced an exit from its $13 billion petroleum business in a portfolio shake-up and announced that it will see it leave London’s FTSE100 index and make Sydney its main listing.

The group plans to sell its petroleum assets to Woodside Petroleum Ltd, creating a new, bigger petroleum company to better navigate the energy transition and give shareholders greater choice in how they manage their fossil fuels exposure, Henry said.

The deal will give BHP shareholders a 48 percent stake in the new company.

Jansen Stage 1 includes the design, engineering and construction of an underground potash mine and surface infrastructure including a processing facility, a product storage building, and a continuous automated rail loading system. Jansen Stage1 product will be shipped to export markets through Westshore, in Delta, British Columbia and the project includes funding for the required port infrastructure.

“We anticipate that demand growth will progressively absorb the excess capacity currently present in the industry, with opportunity for new supply expected by the late 2020s or early 2030s. That is broadly aligned with the expected timing of first production from Jansen. Beyond the 2020s, the industry’s long run trend prices are expected to be determined by Canadian greenfield solution mines,” BHP said in a statement. “In addition to consuming more energy and water than conventional mines like Jansen, solution mines tend to have higher operating costs and higher sustaining capital requirements.”