[miningmx.com] — AN AUSTRALIAN politician who has played a key role in developing BHP Billiton’s Olympic Dam copper and uranium mine and is now under pressure to step down has vowed to stay on until October 20 to finalise an expansion of the mine, suggesting talks may be nearing an end.
The expansion, which analysts predict could cost $20bn or more, has been under assessment for its environmental impact by various levels of government with no clear approval date.
“I will be stepping down as premier on October 20,” South Australia state Premier Mike Rann said in a statement.
Separately, Rann told reporters he wanted to finalise several projects in the state but that negotiations relating to the expansion of Olympic Dam remained paramount.
There was now a “ticking clock” over those negotiations, he said,
An expanded Olympic Dam mine would generate up to $5.5bn of revenue a year and under the current taxation regime would pay about $900m a year in taxes and royalties, according to an estimate by Morgan Stanley.
BHP Billiton is earmarking nearly $10bn of a planned $80bn capital-spending spree over the next five years to expand iron ore and coal mining in Australia but has yet to allocate funding for Olympic Dam.
The company in the past has only said it expected governmental decisions sometime in the second half of 2011.
If the expansion gets the go-ahead, it could nearly quadruple the mine’s copper production to 750,000 tonnes per year over 30 years, putting Olympic Dam on near-par with the massive copper lodes of South America.
It would also lift annual production of uranium from around 4,000 tonnes now to 19,000 tonnes, more than is produced each year in all of Kazakhstan, the world’s top producer.
BHP Billiton declined to comment directly on a surprise announcement on Monday by Rann that he plans to hang on to his job another two months despite political pressure to move aside as soon as possible.
“Our focus continues to be to follow the process set down by the Commonwealth, South Australian and Northern Territory governments to progress environment approvals for the Olympic Dam project and finalise indenture negotiations,” BHP Billiton spokesperson Kelly Quirke said.
The indenture negotiations refer to proposed amendments to legislation in the Roxby Downs township where the mine is located to allow expansion work to commence.
Located 560 km north of Adelaide, Olympic Dam is a unique multi-mineral find.
It is the world’s fourth-largest remaining copper deposit, fifth-largest gold deposit and the largest uranium deposit. It also contains significant quantities of silver.
Most of Olympic Dam’s employees live in Roxby Downs, population 4,000, situated about 16 km from the mine, hence the concerns over the uranium production and general waste from the operation.
The expansion hinges on digging a new open pit mine, which would lift ore production six-fold and require more minerals processing facilities for breaking down ore and smelting. The open pit would operate simultaneously with the existing underground mine.
It would also mean building more roads and living quarters for workers.
Rann has described Olympic Dam as the “mother ship” among some 50 mines he expects will eventually be developed in South Australia.
BHP Billiton, which is widely forecast to post Australia’s largest annual corporate profit ever of around $21 billion on Aug. 24, has faced criticism from some analysts for moving too slowly to lift its copper business as production tapers at its majority-owned Escondida mine in Chile, the world’s largest copper mine.
