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BHP Billiton Ltd.'s move to reconsider major spending plans may delay the construction of a promised potash mine in Saskatchewan, another sign the commodity "supercycle" is gearing down as slower global growth cools demand.

The Jansen project, estimated to cost as much as $12-billion, has the potential to become the largest potash mine in the world and is one of three major projects BHP was slated to consider for approval later this year. But comments by the global mining giant's chief executive officer, Marius Kloppers, suggest the company could postpone such developments.

"You should not expect in the next six months any new major approval of projects," Mr. Kloppers said in an interview with Caixin Media Co.

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"The economics of some of these projects has changed," he said. "I think for the next two years, 18 months perhaps, we will just wait and see how things develop."

Resource companies around the world have become nervous as growth in China and India cools, easing global demand for commodities. The mining industry has enjoyed an extended stretch of high prices, but this so-called supercycle has escalated capital costs and prompted some governments to raise royalty rates in an effort to cash in on the boom. Now that supplies are more closely aligned with demand and costs remain hot, megaprojects may be losing their allure.

A delay at Jansen is a "reasonable possibility," said Joel Jackson, an analyst at BMO Nesbitt Burns. But BHP must also be mindful of its relationships in Saskatchewan, he noted.

The Jansen project played a key role in BHP's attempt to acquire Potash Corp. of Saskatchewan Inc. for $38.6-billion (U.S.) in 2010 in a hostile bid. The takeover was blocked by the federal government, which had sought guarantees from BHP that it would proceed with the Jansen development. But BHP, needing to carry out due diligence, was not in a position to give such assurances.

BHP may still issue a go-ahead for Jansen by year-end, but current trends in the potash market serve as a headwind.

Shares of Potash Corp. have tumbled amid uncertain demand from major buyers of the mineral, used in making fertilizer to boost crop output, and Potash Corp. itself has curtailed some production this year.

China consumes about 50 per cent of the world's steel-making products; 40 per cent of the world's aluminum and copper; and between 5 and 20 per cent of the world's uranium, oil, and potash, according to BHP.

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Mr. Kloppers' concern extends to two other major projects: a copper-uranium expansion and an iron-ore expansion project, both in Australia. The three, along with other expansion plans, have an estimated price tag of around $80-billion (U.S.), a pricey sum at today's commodity prices as the company emphasizes maintaining its dividend and solid credit rating.

BHP has already earmarked $1.2-billion for a feasibility study at Jansen, which is about 140 kilometres east of Saskatoon and expected to produce about eight million tonnes of potash a year when it is operating at full speed. There are about 400 people working at the site, and the two shafts – one service, one production – have been excavated to about 45 metres. The engineering work necessary to produce the feasibility study will not be halted, said Ruban Yogarajah, a London-based spokesperson for the company. First production at Jansen would begin in 2015.

"We must get it right technically but the market opportunity is largely in front of us. Therefore, making sure that we have all the engineering in our Jansen project right is of paramount importance," Mr. Kloppers said May 15 at a mining conference. "We are not compelled to fast track it and the decisions we make today will drive the returns over a long time in that asset."

BMO's Mr. Jackson said BHP officials "need to be concerned about their reputation with the Saskatchewan government so that if they do want to eventually build Jansen or take a run at Potash Corp. again one day, or take a run at Mosaic Co. one day, they [will]want to watch how they progress Jansen.

"If they are already set up to start sinking the shafts, and they are worried about their reputation in the province, they might just keep going at it, just maybe not at the fastest pace."

Saskatchewan expects potash royalties to bring in at least $705.2-million in 2012, while oil royalties will haul in $1.6-billion, said Roy Schneider, a spokesperson for the province's energy and resources department.

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