BHP is eyeing a possible $US2.1 billion ($2.8 billion) expansion of its Olympic Dam underground mine in South Australia, where it says the copper resource is so large it would take 500 years to deplete at the current rate of mining.
Top BHP executives briefed investors and analysts on the global miner’s Olympic Dam operations and hopes for expansion on Tuesday in Adelaide, and confirmed that the so-called Brownfield Expansion (BFX) option at Olympic Dam was likely to be considered by BHP’s board in 2020.
But BHP executives stressed that any expansion at Olympic Dam would be “subject to strict capital allocation framework tests”. Investors and analysts are touring the site this week.
“We have a truly unique resource here at Olympic Dam. It has an enviable grade profile, which will be mined to coincide with attractive fundamentals in the copper market. It also has optionality to grow,” said Olympic Dam asset president Jacqui McGill.
“Current estimates put the OD (Olympic Dam) resource in excess of 120 million tonnes of copper equivalent. At current production rates, it would take us around 500 years to deplete it. And while scale is important, what makes Olympic Dam so unique is the combination of grade and scale,” she said.
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