Shares of BHP Group took a significant hit on Friday after the world’s largest publicly listed mining company revealed substantial cost overruns at its Jansen Stage 2 potash project located in Canada, along with a $2.3 billion financial charge.
The Melbourne-based miner’s stock dropped as much as 4.4%, falling to A$62.21 — putting the company on pace for its worst trading day since March 9. The share price also touched its lowest point since June 12.
In a statement released late Thursday, BHP announced it was raising the estimated cost for the second stage of the Jansen project to $6.9 billion, up from the previous estimate of $4.9 billion — a $2 billion increase.
This latest cost revision is the third time BHP has surpassed both cost and timeline projections across the project’s two stages, dealing another blow to the company’s long-running strategy to expand its operations beyond copper and iron ore.
BHP also confirmed that the revised project costs would result in an impairment charge of approximately $2.3 billion tied to the potash development.
