BHP Billiton Jansen Project Update
8 October 2010
Saskatoon, Canada and Vancouver, Canada
BHP Billiton welcomes the Conference Board of Canada’s considered and comprehensive examination of the prospects for Saskatchewan and their recognition that BHP Billiton’s interests as the owner of PotashCorp would be aligned with the interests of the province.
The Conference Board identifies the Jansen development as a project that will have a significant impact on the economy of Saskatchewan. Indeed, these benefits are compelling, but the full extent of them was unavailable to the Conference Board as it completed its work.
BHP Billiton is pleased to provide some updated information on the project's economic impact - taken from its forthcoming Environmental Impact Statement.
- During the construction phase the on-site workforce is expected to peak at approximately 4,200. On average during construction of the Jansen Project, the equivalent of 2,900 full time jobs will be created in Saskatchewan from direct, indirect, and spin-off employment.
- These employees, and the companies that work with us, are likely to pay an average of C$280 million per year in Federal and Provincial taxes(1) over the project's construction phase.
- Over the multi-decade operating life of Jansen, BHP Billiton expects to pay approximately C$90 billion in royalties and taxes to the municipal, provincial and federal governments(2). Approximately 65% of such payments will be to the Government of Saskatchewan.
The Conference Board notes that provincial tax receipts could fall initially as payments would be deferred while BHP Billiton offsets certain tax deductions related to the construction of Jansen against PotashCorp revenue. BHP Billiton notes that in future years when Jansen starts to operate and such deductions have been utilized, the reverse occurs and the Province receives more taxes than it would have otherwise. Such deductions, which apply to all participants, are part of the Government of Saskatchewan’s sound policy of encouraging investment and apply to new Greenfield developments and Brownfield expansions.
In addition, BHP Billiton believes that the additional corporate, income and sales taxes paid by those building Saskatchewan's first new potash mine in 40 years, are likely to offset the deferred payments. The transfer of a large number of highly paid management jobs from Illinois, USA to Saskatchewan is also likely to materially increase the Province's tax receipts.
(1) This figure includes tax revenues for all Canadian Provinces.
(2) This figure is an estimate based on the Government of Saskatchewan's published 2014 potash price assumption from the 2010-11 budget.