Australian miner working on plan to boost output in shift of focus to copper, petroleum amid growth of Asia’s middle class
OLYMPIC DAM, Australia— BHP Billiton Ltd. executives aim to devise a way over the next year to boost copper output from Australia’s biggest underground mine by up to 40%, even before a proposed and long-awaited mega-expansion of its operations here.
Meantime, a plan to halve costs within two years is on course and should strengthen the case for the ultimate buildout of the mine, said Olympic Dam Asset President Jacqui McGill.
Olympic Dam, the world’s biggest deposit of uranium and one of the biggest known sources of copper and gold, is at the heart of BHP’s strategy to grow its output of copper and petroleum, tacking away from commodities such as iron ore where it expanded heavily in recent years but which now face an oversupply in world markets.
Behind BHP’s strategy to shift its focus to copper and petroleum investments is the belief that Asia’s, and particularly China’s, burgeoning middle class will ramp up spending on energy and consumer goods such as air conditioners and refrigerators, which require a lot of both.
It is a similar strategy to rival Rio Tinto PLC, which is now also spending more on copper projects including a large, underground expansion of a mine in Mongolia. Rising copper output from these deposits should help offset a projected mismatch between supply and demand in the coming years, possibly softening any recovery in prices by adding to available supplies.
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