BHP studying $2.1bn medium-term copper expansion project
JOHANNESBURG (miningweekly.com) – Mining Major BHP is considering further expansion options its Olympic Dam operation, in South Australia, which will sharply increase copper production as the miner believes the copper market is heading for a structural deficit in the next six years.
BHP has taken a three-stage option-based approach to development at Olympic Dam, which has the world’s third-largest copper equivalent deposit, asset president Jacqui McGill explained on Tuesday.
The first stage, which is aimed at debottlenecking the mine and improving productivity, entails the mine expansion in the high-grade Southern Mine Area (SMA). The SMA expansion is currently under way and will give Olympic Dam capacity of 230 000 t/y.
The move into the SMA will increase copper grade to 3% by the 2023 financial year, which is when BHP expects the copper market to enter a structural deficit.
The medium-term focus is on the brownfield expansion (BFX) option, which involves the accelerated development in the high-grade SMA. Should the miner proceed with the BFX option, copper production will increase to 330 000 t/y and Olympic Dam will move into the first quartile of the cost curve.
The BFX will entail an investment of $2.1-billion, 45% of which related to mine development.
In a slide presented by McGill at BHP’s investor briefing in Adelaide, she said that the BFX option was currently in the study phase and that board approval would be sought to execute the project in mid-2020. First incremental production is targeted in late 2021 and project ramp up and completion is targeted for late 2022.
Beyond the BFX, BHP is studying a major expansion – the Olympic Dam Expansion Project, or ODEP – to lift capacity to between 450 000 t/y and 500 000 t/y. The ODEP will potentially involve large scale underground and greenfield surface expansion and possibly heap leach technology.
The Olympic Dam operation is set to produce 150 000 t/y of copper equivalent in the 2018 financial year, at an unit cost of about $2.10/t. A major smelter maintenance campaign is currently under way and will be completed in December.
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