BHP’s Olympic Dam Growth Plans Get Major Development Status

BHP (ASX:BHP,NYSE:BHP,LSE:BLT) has had the growth plans for its Olympic Dam mine deemed a major development by the South Australian government.

The major miner is currently looking to expand mining and production at Olympic Dam from 200 kilotonnes per year (ktpa) to a maximum of 350 ktpa. According to the company, the government’s decision marks the first step in the state and federal process of having the expansion assessed for social, economic and environmental impacts.

“BHP is aiming to achieve stable operations and sustainable growth at Olympic Dam through a staged and capital-efficient approach over the long term,” said Laura Tyler, asset president at Olympic Dam.

“Olympic Dam is a world-class resource with the potential to deliver value to BHP and South Australia for many decades to come, especially given our positive outlook for global copper demand. We are pleased the South Australian government has declared Olympic Dam’s growth plans a major development, recognising our significance to the state.”

BHP is now moving forward on growth studies for Olympic Dam with the goal of gaining board approval for a capital project in mid- to late 2020.

The proposed expansion, which is set to come with a $3-billion price tag, would also increase Olympic Dam’s gold, silver and uranium production. According to Dan van Holst Pellekaan, South Australia’s minister for energy and mining, 1,800 construction jobs and 600 ongoing operational positions will be created from the proposal.

“Declaring BHP’s proposed expansion of Olympic Dam a major development is a key milestone in this important project,” he said in a statement. “Olympic Dam is already the state’s largest mining operation, providing jobs, investment and royalties for South Australia.”

The minister added that the expansion’s assessments — especially on the environmental front — will be thorough, as BHP has made proposals including using up to 50 megaliters of water from the Great Artesian Basin per day.

“This proposal will be subject to a rigorous scientific assessment to ensure maximum draw down limits are scientifically determined and sustainable, and that other waters users are not adversely impacted,” he explained.

“There will also be extensive public consultation on the proposed expansion to make sure that communities have their say and there is transparency of the assessment of the project.”

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.