BHP Billiton has defied shareholder pressure and short-term market ructions by announcing a $US2.6 billion ($2.8 billion) expansion of its potash business.
The decision to devote scarce funds towards developing Canada's Jansen potash mine was announced on Tuesday amid a weaker than expected set of full-year results from the multinational miner.
BHP reported $US11.8 billion worth of underlying earnings, well below the $US12.6 billion that a consensus of analysts were expecting.
The result was dramatically lower than both last year's $US17.1 billion in underlying earnings, and the monster $US23.6 billion underlying profit that was set in the boom year of 2011.
Net profit came in at $US10.9 billion ($12.3 billion), down 29.5 per cent from the previous year.
BHP blamed the lower than expected profit on a "temporary increase in the group's effective tax rate", as well as financing charges related to some recently issued debt securities.
Despite failing to meet external expectations, BHP chief executive Andrew Mackenzie described the result as "strong" in the face of "challenging times".
Shareholders will take home a full-year dividend of $US1.16, which is US4¢ more than last year.
But the potash decision dominated the results, and will gradually increase BHP's exposure to the world's growing demand for food, given potash's role in the production of fertiliser.
BHP announced it would spend $US2.6 billion developing mine shafts at Jansen, with that money set to be sequenced over a number of years at an average spend of about $US800 million per year.
The decision to invest comes at a time when potash prices are expected to fall on the back of a cartel collapse in Europe, and also as BHP seeks to contain capital expenditure to a relatively modest $US16 billion in the 2014 financial year.
Mr Mackenzie said Jansen may yet be developed in partnership with another company as a way of pursuing "a development path that maximises returns for shareholders".
The project will be developed slowly, with Mr Mackenzie hinting that first production of potash from the expanded mine was not certain to come this decade.
"I don't want to give you a production date ... we want to retain complete flexibility to enter the market at a time in which we think is right to maximise returns to our shareholders," he said.
He said BHP had not even decided the specific design of the mine, let alone determined the start date for production.
"When we decide to do that [start production] is going to be very much driven by how we view the market and, obviously, our ability to fund further phases beyond what I have announced today.
"We believe in the next decade, 2020 onwards, that the world will require some new mines ... but getting that timing absolutely precise is, of course, very difficult."
Mr Mackenzie has previously said potash has the potential become the company's "fifth pillar" alongside iron ore, coal, petroleum and copper.
Some of BHP's big investors, including BlackRock fund manager Evy Hambro, have recently warned BHP that pushing ahead with spending on Jansen would be "misguided" in the current climate.
In keeping with that sentiment, BHP's London shares were about 3 per cent lower in early trading.
But in a result that investors are likely to welcome, BHP's cost-cutting drive has taken $US2.7 billion worth of costs out of the business, and Mr Mackenzie said there was "a lot more to come".
BHP said it had paid $US200 million worth of mining tax to the Australian government in the 2013 financial year, plus a $US140 million instalment for the recent June quarter.
The company's struggling nickel and alumina divisions show no sign of improvement, with the Nickel West asset suffering a $US1.2 billion write-down, and the Worsley Alumina refinery taking a $US1.6 billion write-down.
Smaller, less-significant write-downs were also recorded in US shale and the Western Australia iron ore divisions.
Mr Mackenzie said despite recent concerns about the direction of the Chinese economy, there were reasonably positive signs that China would achieve annual economic growth of between 7 per cent and 8 per cent.
He said the gradual urbanisation of China would provide a "significant spark to demand for many of the commodities we produce".