BHP Group's (ASX:BHP) $2 billion increase to the capital expenditure budget for its Jansen potash project is more than Jefferies had expected, the investment firm said in a Thursday note.
The increase, which marks the third upward revision across Jansen in under a year, takes total planned development costs for the project to nearly $20 billion.
"While another capex increase had been expected, this update is still unhelpful, especially when the fundamental outlook for potash appears to be notably poor for the foreseeable future," the equity research firm said.
It added that execution risk remains as roughly 84% of the project's stage 2 construction is still pending, with first production expected late in fiscal year 2031, although stage 2 still screens as providing better returns than stage 1 due to infrastructure leverage.
Jefferies reiterated its hold rating on BHP, saying that it sees "better value elsewhere in mining for now."
The company's shares fell 4% in recent Friday trade.