World’s biggest open pit operation could be a reality

By Paula Wallace

Its long-awaited Draft Environmental Impact Statement (EIS), five years in the making, outlines a project that will take 11 years to complete construction.
BHP is not releasing any information in relation to potential costs of the proposed expansion but some industry experts have guessed at a figure between $10 and 15 billion.
Whilst it has outlined a number of aspects of the massive Roxby Downs development, the miner has been criticised by environmental, anti-nuclear and community groups for not providing a wider range of alternatives which for one would take into account concerns about radioactive waste at the mine site and in downstream uses.
Olympic Dam is currently Australia’s largest underground mine and with the expansion of the open pit, ore production is forecast to increase six fold, to a total of 72 million tonnes per annum (mtpa).
Production of copper concentrate is estimated to rise from 600,000 tonnes per annum (tpa) to 2.4 million tonnes per annum (mtpa); refined copper from 235,000 tpa to 750,000 tpa; uranium oxide from 4,500 tpa to 19,000 tpa; gold bullion from 100,000 ounces (oz) per annum to 800,000 oz per annum; and silver bullion from 800,000 oz per annum to 2.9 million oz per annum.
According to BHP, 1.6 mtpa of the 2.4 million tonnes of copper concentrate produced would be exported, with the balance further processed at Olympic Dam to refined copper, uranium oxide, gold and silver.
Of the annual export tonnage of copper concentrate, BHP told The Australian Journal of Mining that it estimates this ore would contain some 1,500 tonnes of uranium oxide. This represents a gross value of around US$230 million per annum based on a long-term uranium price of US$69.50/lb U3O8.
Up until recently the South Australian Premier Mike Rann said his Government did not support an expansion plan whereby copper concentrate would be exported by BHP, but in the light of the economic slowdown he has changed his view.
In 2007 he reportedly said, “BHP Billiton is expecting the South Australian Government to invest hundreds of millions of dollars into this mine through the provision of infrastructure and services…we want and expect a decent return on our investment,” said Rann.
At that stage he was expecting that increased production from Olympic Dam would create thousands of new jobs and investment in infrastructure and processing facilities.
The company said, “It is BHP Billiton's understanding that the South Australian Government endorses the project configuration described in the Draft EIS which includes provision for sale of product in concentrate form.”
It is estimated the project would employ 8,000 permanent workers with 13,000 flow-on jobs, once it is operational.
BHP said that it is currently “continuing discussions with the South Australian Government about the provision of public infrastructure necessary to support the expansion of the Roxby Downs township.”
It also said it is still investigating options for the sale of the copper concentrate.
Premier Rann was reported, early in May, reaffirming the Government’s “partnership” approach to the project.
"We know that we have a 100-year mine, we know that we're going to get a four-fold increase in royalties from Olympic Dam.
"So we want to make sure that we play our part in terms of delivering infrastructure," he reportedly said.
The Olympic Dam operation currently contributes $1.7 billion annually to the Gross State Product (GSP) of South Australia. The estimated contribution of GSP over a 30-year timeframe from the start of the expansion would be $45.7 billion in net present value above the business-as-usual case (that is, if the expansion did not proceed), or an average annual increase of $6.9 billion at full operating capacity.
Over the past three years, royalty revenue to the SA Government from the existing operation has averaged nearly $60 million per year. This is predicted to increase more than four-fold on completion of the expanded operation.
The project includes the export of concentrate, via the Port of Darwin. The estimated contribution to the Northern Territory GSP over the modelled 30-year time frame would be $936 million.
The project will require the approval of the South Australian, Northern Territory and Federal Governments to proceed, and in its current form includes huge water and energy demands.
The study states that an expanded mine would consume five times as much power as the current Olympic Dam mine and consume 250 megalitres of water a day - an increase from the current daily level of 37 megalitres.
The plan has a desalination plant being built near Whyalla to provide most of the water required, while a new 105 kilometre rail link will be needed to connect the mine to the Adelaide-Darwin railway.
The effects these water and energy demands will have on the company’s overall carbon footprint and that of South Australia, have concerned environmental and community groups.

To read the final part of this report see next week’s AJM newswire.

Mining industry to host public forum on uranium mining: Darwin
Australia’s uranium industry will be the focus of a free public forum to be held as part of a major international conference on uranium mining.
While there has been much political discussion and debate about the uranium industry, there has been little opportunity for members of the community to learn more about the technical aspects and regulatory controls applied to ensure the safe and sustainable development of uranium.
The Uranium Industry Public Information Evening, to be held on Thursday June 11th at the Darwin Convention Centre, aims to help community stakeholders to become better informed on current practices and policies in the uranium industry.
The event is jointly hosted by The Australasian Institute of Mining and Metallurgy and the Northern Territory Resources Council.
The public forum will feature two sessions in which leading experts will give short presentations about key issues in uranium and will be available to answer questions.
The Uranium Public Information Evening is recommended to interested residents of the Northern Territory, mining professionals, professionals from other industries, and students who would like to understand more about uranium exploration, mining, processing, radiation safety controls and indigenous and community stakeholder relations.
The event will run from 6-8:30 pm. Attendance at the forum is free, but registration is required. To register your interest in attending, or for more information about the Uranium Public Information Evening tel: +61 (0)3 9658 6159 or 0406 061 455 or email: msarder@ausimm.com.au


 To view the second part of this report, click here.