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SNC to develop BHP's Saskatchewan potash projects

A mill manager a pile of processed potash at a mine storage facility in Colonsay, Saskatchewan, on Sept. 24, 2009.

DAVID STOBBE/David Stobbe/Reuters

BHP Billiton Ltd.BHP Billiton has selected Montreal-based engineering firm SNC-Lavalin Group Inc.SNC-Lavalin for a multiyear contract to help the Anglo-Australian mining company manage various potash projects in Saskatchewan.

SNC didn't disclose the value of the contract, which involves establishment of a project execution hub where SNC and BHP will apply uniform standards and leverage efficiencies in the execution of the projects.

SNC will initially complete a feasibility study for the first phase of the Jansen potash project, about 140 kilometres east of Saskatoon.

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BHP announced in January that it would spend $240-million developing the project, including ground freezing to allow shaft sinking as well as completing detailed engineering, equipment and materials commitments.

SNC noted that it has worked with BHP over the past 25 years on overseas projects.

"This award is further recognition of our global expertise in potash combined with our strong Canadian roots and presence in Saskatchewan," said SNC executive vice-president Feroz Ashraf.

SNC's mandate includes management of the hub program and execution of feasibility studies. It will also provide engineering, procurement and construction management once the projects are approved by BHP.

The Jansen project, which BHP had begun before its unsuccessful attempt to acquire Potash Corp. of Saskatchewan last year, is expected to be built in three phases.

Engineering and construction of the first phase is expected to begin in 2012 to develop two million tonnes of annual production capacity. Other infrastructure and related projects include the development of port facilities on the west coast of the United States.

BHP has already submitted an environmental impact statement for the proposed potash mine. BHP has exploration rights to more than 14,500 square kilometres in Saskatchewan.

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The Jansen project was a key point of dispute between BHP and Potash Corp. during the takeover fight. Potash Corp. had questioned BHP's commitment to develop the project if it were successful in acquiring the Saskatoon-based company.

Federal Industry Minister Tony Clement killed BHP's hostile takeover attempt of Potash Corp. when he ruled the deal would not be a "net benefit" to Canada under provisions of the Investment Canada Act.

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