SYDNEY – (Reuters) – Expansion by BHP Billiton’s giant Olympic Dam mine in Australia, once considered among its prized growth assets, is off the agenda due to low metals prices and productivity inefficiencies, the company said on Friday.
BHP shelved plans for a multi-billion-dollar expansion of the copper, gold and uranium mine in 2012 after a year-long study, citing a need to reign in spending as the Australian mining boom started to fade.
Since then business leaders and politicians, including Australian Prime Minister Tony Abbott, have implored BHP to reconsider its decision, hoping to alleviate job losses caused by the exit of car manufacturing in Australia.
But BHP has stood firm and on Friday reiterated its mothballing of expansion plans for Olympic Dam.
“Our immediate challenge is how we self-fund the required investment by being prudent and creative with our capital and engaging our workforce to not only reduce costs but also accelerate the initiatives that will reduce our costs,” Darryl Cuzzubbo, Olympic Dam assetpresident, said in a business speech emailed to Reuters.
The mine was originally designed to yield 200,000 tonnes of copper annually but consistently runs under that level due to maintenance issues, such as smelting and equipment repairs.
“Once we are able to run our existing operation at full capacity, we then – and only then – earn the right to grow,” Cuzzubbo said.
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