BHP dispels Olympic Dam concerns
Sydney Morning Herald
Thursday March 31, 2011
BHP BILLITON has moved to dispel suggestions that the development timetable for its planned $30 billion expansion of the Olympic Dam copper/uranium/gold mine in the South Australian outback was set to slip because of uncertainties surrounding demand for uranium.The doubts have been caused by the still out-of-control Fukushima nuclear power plant in Japan.BHP's response was to announce yesterday that the Olympic Dam expansion had progressed to the stage of a feasibility study. That was unusual for BHP, which does not normally announce the progression of projects through the various stages before a final investment decision.It was also unusual that BHP's announcement was made before the release of the expansion project's supplementary environmental impact statement (SEIS) and the start of the formal assessment of the project by the federal, South Australian and Northern Territory governments (Darwin will be an export point).BHP's uranium president, Dean Dalla Valle, said the company was now waiting for "permission from the Commonwealth to publish the SEIS, which will allow formal assessment of the project by the respective governments."Some analysts suggested that because of the continuing concerns at Fukushima, BHP would be keen to see no delay to its development timetable, with government clearance the key approval required before a likely final investment decision early next year.But others suggested it was more likely that BHP made the unusual move-to-feasibility-study announcement to calm fears in the South Australian government that international concerns about nuclear power caused by Fukushima could threaten BHP's planned expansion.While Olympic Dam produces uranium (and gold), it is primarily a copper mine in terms of revenue and profits. But it is the world's biggest uranium deposit and is capable of supplying more than 20 per cent of world demand for the radioactive material once expanded.Since the extent of damage at Fukushima has become an international concern, questions have been raised about the capacity of the world's nuclear industry to soak up the huge increase in the supply of uranium that would result from the Olympic Dam expansion.Annual capacity at Olympic Dam is now rated at 235,000 tonnes of copper, 4500 tonnes of uranium and 100,000 ounces of gold. Fully expanded, the mine's annual capacity would go to 750,000 tonnes of copper, 19,000 tonnes of uranium and 800,000 ounces of gold from a combination of the existing and new operations.At current prices uranium output at Olympic Dam would account for 25 per cent of revenue. And because of Olympic Dam's mineralisation, the uranium has to be produced; it has to be separated from the copper.In its staged expansion, BHP plans to develop an open-cut project, removing 410 million tonnes of overburden a year for five years to get to the top of the ore body. In 40 years it will have created a hole 4.1 kilometres long, 3.5 kilometres wide and up to a kilometre deep.Apart from the world's biggest man-made hole, BHP will build a "mountain" in the outback, with rock from the operation to be stacked 150 metres high on a 6720-hectare site.