Canadian government pledges up to $100M to help reduce emissions at future BHP potash mine in Sask.

The Canadian government has offered up to $100 millionto help global Australian mining giant BHP create the "world's most sustainable potash mine" in rural Saskatchewan.

BHP's Jansen mine project, locatedabout 140 kilometres east of Saskatoon, iscurrently in development and is expected to be operational by 2027. It's planned to be thelargestpotashproducingminein the world,.

Canadian officials are putting the money forward to help the company reduce the mine's carbon footprint and invest in more environmentally friendly technology.

The company said it is committed to reducing emissions.

"You will see 50 per cent less carbon dioxide coming out of this mine than a traditional potash mine. We're committed to responsible use of water,we will use 60 per cent less water than your average mine in terms of production of potash on a tonne-per-tonne basis," Ragnar Udd, president for minerals America withBHP, said while speaking at the federal funding announcement in Saskatoon on Monday morning.

"We expect that Jansenwill generate the lowest direct onsite emissionsintensity of any potash mine in North America."

Udd said BHP expects to use60 per cent less equipment underground for the Jansen mine,while being 2.5 times more productive.

It will also introduce electric vehicles for underground work, reducing diesel exhaust. Fundingwill help the mine be more technically advanced, embracing "state of the art" integrated mining systems for boring and bringing the minerals to the surface, Udd said.

Potash is apotassium-rich salt used mainly as fertilizer by farmers.

Federal officials said on Monday that the partnership between the government and BHP is expected to benefit the environment andthe economy, while addressing growingglobal food security concerns and shortages.

Mike Henry,BHP's CEO,noted Russia's invasion of Ukrainehas disrupted the global potash supply and emphasized the need for amore stable provider.

Both Russia and Ukraine aremajor fertilizer-producing countries.Henry saidCanada is seen as a stable jurisdiction that can meet the growing global demand for years to come.

"We think the need for potash is going to be driven by global population growth, the move to improvediets, and the need for more sustainable agriculture," he said.

BHPcommitted to the Jansen Stage 1 project last year with a $7.5-billion investment a decision Henry said was a decade in the making. He said the company's commitment to potash mining in Canadais a vote of confidence for the country.

The company anticipates its initial production capacity will be 4.3 to 4.5 million tonnes of potash per year, increasing Canada's production of the mineral by nearly 22 per cent.

• Sask. fertilizer company ramping up potash production in response to Ukraine crisis

Federal Industry Minister Franois-Philippe Champagnesaid Canadaexported 22 million tonnes of potash last year, and like Henry, he believes the demand will only grow.

In addition to its green ambitions, officials note that theproject is expected to create hundredsof local jobs. BHP has also signedopportunities agreements with six First Nations in southern Saskatchewan in an effort to further economic opportunity and partnership.

Henry said BHP isacceleratingthe work on Phase One and launching studies for Phase Two.