BHP Group (BHPB.L/BHP.AX): Headwinds at Jansen continue; impairment and stage-2 capex revision

Research evidence excerpt

BHP Group (BHPB.L/BHP.AX): Headwinds at Jansen continue; impairment and stage-2 capex revision

Viewpoint |

18 Jun 2026 06:54:41 ET │ 15 pages

BHP Group (BHPB.L/BHP.AX)

Headwinds at Jansen continue; impairment and stage-2 capex revision

CITI'S TAKE

Ephrem Ravi AC

In an update announcement for Jansen project, BHP has revised the capex +44-20-7986-2462

expectations for stage-2 of the project to $6.9 billion, up from $4.9 billion ephrem.ravi@citi.com

earlier. Investor expectations for capex revision were anchored between $1-

1.5 billion in our view. The capex revision is driven by general cost inflation, Krishan M Agarwal

while the additional working hours driven by two-year extension to the +44-020-7986-4092

commissioning timeline (communicated in Aug’25) has also contributed to krishan.agarwal@citi.com

higher capex. The company has announced taking $2.3 billion impairment

on the carrying value of Jansen project, necessitated by the higher capex Ijeoma Ihuegbu

estimates, while the underlying assumptions for unit costs, product pricing ijeoma.ihuegbu@citi.com

assumptions etc remain unchanged. Jansen stage-1 is scheduled to deliver

first production on track for mid-27. Shashi Shekhar, CFA

Omnath Sinh

Project’s ongoing operating dynamics remains attractive — BHP continues to

guide for the project costs between $114-130/t, once the Jansen stage-2 ramps up, Jack Whelan

making the mine one of the world’s lowest cost potash operations. The expected +61-2-8225-5979

EBITDA margin for the project continues to be around 65%, while the expected IRR jack.whelan@citi.com

even with the revised capex stands at 11%. The low costs position and expected

production at 8.5 million tonnes with stage-2, the payback period for the project

now stands at 8 years.