Resources minister pressures BHP to expand Olympic Dam

IRJ – May 28 – Australia’s resources minister Martin Ferguson is putting pressure on mining major BHP Billiton to expand the Olympic Dam project, according to Fairfax analyst John Meyer.

There is speculation that rising costs in the country and a less certain environment for uranium and copper demand could cause BHP to defer the A$20bn dollar investment it is considering for the next Olympic Dam expansion.

Meyer added that the mine has already suffered two catastrophic fires in its processing plant on commissioning and requires substantial investment to meet its required economies of scale.

“No wonder BHP might want to push this particular white elephant further out,” he said.

Expansion of Olympic Dam would involve creating a large open mine to tap an ore body that begins around 400 metres deep, as well as a 270km electricity transmission line, 400km pipeline, large desalination plant, 105km railway link from Pimba to the mine.

It would increase the amount of ore mined at Olympic Dam from 12 million tonnes per annum (Mtpa) to 72Mtpa; copper concentrate production from 600,000tpa to 2.4Mtpa; uranium oxide from 4,500tpa to 19,000tpa; gold bullion from 100,000oz to 800,000; and silver from 800,000oz to 2.9 million.

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