CN Railway Lands Potash Haulage Deal with BHP to 2040
1h ago|4 min readStandard
Fazen Markets Editorial Desk
Collective editorial team · methodology
potashcanadian-national-railway
Fazen Markets Editorial Desk
Collective editorial team · methodology
Trades XAUUSD 24/5 on autopilot. Verified Myfxbook performance. Free forever.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. Vortex HFT is informational software — not investment advice. Past performance does not guarantee future results.
Canadian National Railway Company announced a long-term haulage agreement with BHP on June 19, 2026, to transport potash from BHP’s Jansen project in Saskatchewan to key ports in the Pacific Northwest and the US Midwest. The contract, which extends to 2040, secures a significant volume anchor for North America’s largest railway network as BHP’s $14 billion Jansen mine begins commercial production. This deal formalizes a critical logistics pathway for a project set to become one of the world's largest potash mines, directly impacting global fertilizer supply chains.
The agreement arrives as BHP’s Jansen Phase 1 mine transitions from construction to initial production, targeting first output in late 2026. Potash demand fundamentals are strengthening, with the USDA forecasting 2026 global potash consumption to reach 77 million tonnes, a 3% increase from 2025 levels. The last major long-term haulage deal for a greenfield potash project was CPKC's 2013 agreement with K+S AG for its Legacy mine, a 10-year pact for up to 2 million tonnes annually. Canada currently exports over 95% of its potash production, making rail capacity to West Coast ports a strategic bottleneck.
The immediate catalyst is the commissioning of Jansen's production shafts and surface facilities, which requires locked-in logistics to meet offtake agreements. Global potash prices have stabilized near $400 per tonne CFR Brazil, providing a favorable margin environment for new supply. BHP requires guaranteed, high-volume rail service to ensure its product reaches international markets competitively against established producers Nutrien and Mosaic.
The Jansen Phase 1 project is designed for an initial production capacity of 4.35 million tonnes per year. BHP has approved a Phase 2 expansion, which would double Jansen's output to approximately 8.5 million tonnes annually. Canadian National's rail network spans over 19,500 route miles across Canada and mid-America, connecting to ports in Vancouver, Prince Rupert, and the US Gulf.
A comparison of projected potash volumes from Saskatchewan illustrates Jansen's scale. Nutrien's total operable capability currently stands at 13.5 million tonnes. Mosaic's Canadian capacity is approximately 10.7 million tonnes. Jansen Phase 1 alone will add volume equivalent to over 30% of Nutrien's 2023 production of 13.4 million tonnes.
The contract locks in volume for CNI for 14 years, providing revenue visibility. BHP's total capital investment in Jansen now exceeds $14 billion US dollars. The deal likely involves unit train shipments, where entire trains carry a single commodity, optimizing efficiency. CNI's rail freight revenue in 2025 was C$15.2 billion, with bulk commodities like potash being a high-margin segment.
The contract is a direct positive for Canadian National Railway, securing a high-volume, long-duration customer for its bulk segment. It strengthens CNI's competitive position against rival CPKC in the Saskatchewan corridor. Secondary beneficiaries include US Midwest fertilizer distributors and blended product manufacturers who will gain access to a new, large supply source via CNI's network.
A key risk is execution. Ramp-up timelines for mega-projects often face delays, which could defer expected revenue for the railway. Market saturation is another concern; the incremental supply from Jansen could pressure global potash prices if demand growth does not keep pace, potentially affecting margins for all producers.
Positioning flow has been neutral to positive for rail equities ahead of the announcement. Logistics and supply chain ETFs may see rebalancing to increase exposure to industrial transportation assets with contracted volume growth. The deal may pressure short positions in competing fertilizer logistics providers who failed to secure the contract.
The primary catalyst is BHP's official announcement of Jansen Phase 1 first production, expected in Q4 2026. Investors should monitor CNI's quarterly earnings calls for commentary on bulk volume growth and contract economics starting with the Q2 2026 report. The next milestone is BHP's final investment decision on Jansen Phase 2, anticipated by late 2027.
Key levels to watch include the weekly railcar loadings for potash, published by the Association of American Railroads. A sustained move above 5,000 carloads per week would signal strong basin activity. For potash markets, the CFR Brazil spot price remaining above $375 per tonne will be crucial for justifying Jansen's expansion.
The deal's success hinges on Jansen's ramp-up curve meeting its 90% capacity utilization target within 24 months of startup. Congestion at the Port of Vancouver, which handled over 900,000 tonnes of potash in April 2026, remains an infrastructure watch point for the entire supply chain.
The agreement does not directly affect existing producers' mining operations, but it intensifies competition in logistics and market access. Nutrien and Mosaic primarily use their own dedicated rail fleets and port facilities. The new volume from Jansen will increase total rail traffic from Saskatchewan, potentially testing system capacity and impacting freight rates for all shippers over time. Producers may seek more long-term logistics contracts to secure cost certainty.
Global potash demand is projected to grow at a compound annual rate of 2-3%, driven by population growth and the need to improve crop yields. Emerging markets in Southeast Asia and Latin America are key demand centers. The long-term contract between BHP and CNI reflects confidence in this structural demand growth, as mining investments require multi-decade horizons to achieve returns on capital exceeding $14 billion.
CNI has invested over C$1 billion annually in its network capacity in recent years. The railway completed significant expansion at its port terminals in Vancouver and Prince Rupert between 2023 and 2025. However, the addition of up to 8.5 million tonnes of annual potash volume from Jansen at full build-out will require precise scheduling and may necessitate further investments in passing sidings and locomotive power in the Saskatchewan corridor.
The 14-year haulage contract provides Canadian National Railway with a high-volume anchor tenant, directly linking its network growth to the expansion of a world-class potash basin.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
Vortex HFT is our free MT4/MT5 Expert Advisor. Verified Myfxbook performance. No subscription. No fees. Trades 24/5.
Trade gold, silver & commodities — zero commission
Start TradingSponsored
Open a demo account in 30 seconds. No deposit required.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.