A key investor in BHP Billiton Limited
(ASX:BHP) has warned the mining giant that spending billions on a new potash expansion would be a misguided move for the company at a time when potash prices look set to fall.
BlackRock fund manager Evy Hambro told media that BHP chief Andrew Mackenzie would be going against some of his guidance if he announces new money for Canada's Jansen potash mine later this month.
BHP will report its full-year results on August 20 and the company is due to give some guidance about the direction of Jansen, which could include new spending to sink shafts at the mine.
The investment decision on the expansion – which may cost more than $US10 billion – has come under question this week after the collapse of a potash cartel in eastern Europe, which has dragged down forward estimates of the potash price.
Mr Hambro says the likelihood of falling potash prices should make the project unattractive for now.
