No decisions yet on huge BHP Olympic Dam expansion project - or Yeelirrie uranium
BHP's head of its uranium division gave an update on the huge planned Olympic Dam expansion, which could make it the world's largest uranium mine, and on its Yeelirrie uranium project in WA
Posted: Thursday , 23 Jul 2009
FREMANTLE, Western Australia -
The head of BHP Billiton's new uranium division, Deane Dalla Valle, told the Australian Uranium Conference in Fremantle today that relevant studies for expansion of the giant Olympic Dam copper-uranium-gold mine in northern South Australia should be available to the board by mid 2010.
The guessing game of what it would cost BHP Billiton to undertake the major expansion at Olympic Dam will remain because Deane Dalla Valle did not offer questioning reporters any solace on this mystery - pointing out that the company was not into speculating.
It certainly has been a speculation ever since the mining giant announced it would consider transforming Australia's largest underground mine - now 800 metres deep - into an open pit, a project made daunting purely because the orebody is under about 300m of sterile cover.
Figures given to this writer have been a cost as high as $A9 billion ($US7.37 B) as the inflationary costs of mining, procuring machinery and equipment and professional staff were a headache until the market meltdown late in 2008. Sanity has been returning to all forms of costs and this may have deflated some of the speculation on bottom-line costs for Olympic Dam. BHP is no doubt encouraged by the consensus for near term metal prices for copper, gold and uranium.
Media speculation this February cast doubts on BHP proceeding with the expansion after the surprise departure of then Olympic Dam expansion chief Graeme Hunt, who months earlier told this writer at another uranium conference that expansion of Olympic Dam was inevitable.
Dalla Valle, who has been helping run Olympic Dam, took charge of the new Uranium Australia division of BHP, which is headquartered in Adelaide. Apart from administering Olympic Dam, this division is also responsible for the blueprint to develop the Yeelirrie uranium project in Western Australia. Both Olympic Dam and Yeelirrie went into the BHP fold through the 2005 takeover of WMC Resources.
He told reporters that if and when a decision is made to proceed with the expansion it would be several years before increased production would be achieved.
Public viewing of the Environmental Impact Statement for the Olympic Dam expansion would conclude on August 7, and the company has had several public recently to outline the project in centres to be impacted - including Roxby Downs and Port Augusta in South Australia and Alice Springs and Darwin in the Northern Territory.
Olympic Dam currently mines 12 million tonnes per annum of ore for 235,000 tonnes of refined copper, 4,500t of U308, 100,000 ounces of gold and 800,000 oz silver. The expansion would lift annual production to 72 Mt for 750,000t of copper, 19,000t U308, 700,000 oz gold and 2.1 M oz silver.
Dalla Valle told MineWeb that not all metals would be shipped from Roxby Downs in refined form. It was projected that there would be 1.8 Mt going out in concentrate form.
He said while China was a big market that the company wanted to woo for uranium there were as yet no set deals to announce.
The Yeelirrie uranium project, discovered by WMC, was progressed more than two decades ago to the launching pad, only to be hamstrung by restrictive Federal policies restricting the number of Australian uranium mines and also by a languishing uranium price.
Yeelirrie was put back into blueprint after the Colin Barnett Liberal Government in Western Australia threw out the bans imposed by the previous Labour State Government.
While WMC had parked Yeelirrie close to the road to mining, Dalla Valle told MineWeb that technology has changed a lot in recent years and that included the technology introduced by Paladin Energy at its Langer Heinrich mine in Namibia that is treating a calcrete ore that is similar to Yeelirrie.
He told reporters that BHP was not in any race to be the first to build an uranium mine in Western Australia. The first step would be to establish a JORC Code reserve from new drilling and studies.
(The conference yesterday and today had two companies pointing out they would be commissioning a mine in WA within the next three years - including Toro Energy (ASX: TOE) with its Wiluna projects and Mega Uranium (TSX: MGA) with its Lake Maitland project. Adding to this South Australian Mines Minister Paul Holloway said that Uranium One and Mitsubishi group planned to commission the Honeymoon project in SA's north east next year. If so, that projected 400t U308 per annum project costing $A80 M ($US65.52 M) would pip the nearby Four Mile project in the race to become Australia's fourth uranium cab off the rank.)