The BHP Group Ltd (ASX: BHP) share price is pushing higher on Wednesday.
In morning trade, the mining giant's shares are up almost 1% to $44.73.
Why is the BHP share price rising?
Investors have been bidding the BHP share price higher today after responding positively to a major investment announcement.
According to the release, the BHP board has approved an investment of US$4.9 billion (A$7.7 billion) for stage two of the Jansen potash project in Saskatchewan, Canada.
This follows BHP's approval of US$5.7 billion (A$9 billion) for stage one of the Jansen potash project in August 2021 and a pre-Jansen Stage 1 investment of US$4.5 billion (A$7.1 billion).
BHP CEO, Mike Henry, believes the investment is an important milestone for the company. He said:
This is an important milestone that underscores our confidence in potash and marks the next phase of the company's growth in Canada. We believe Jansen will deliver long-term value for shareholders and the local community, and will position BHP as one of the leaders in the global potash industry.
Why potash?
Potash may not be something that gets talked about a lot, but BHP certainly believes it should be. Especially given its exposure to a number of megatrends. Henry explains:
The stage two investment advances BHP's strategy to increase its exposure to commodities positively leveraged to the global megatrends of population growth, urbanisation, rising living standards and decarbonisation. Potash, used in fertilisers, will be essential for food security and more sustainable farming.
BHP highlights that this additional investment will transform Jansen into one of the world's largest potash mines, doubling its production capacity to approximately 8.5 million tonnes per annum (Mtpa).
Though, it may not stop there. The company revealed that longer term, Jansen has the potential for two additional expansions to reach an ultimate production capacity of 16 Mtpa to 17 Mtpa. This will be subject to studies and approvals.
