#Official Mining Thread

[AG]

SA economy to outperform nation
CAMERON ENGLAND, CHIEF BUSINESS REPORTER
October 17, 2008 03:45pm
THE state's economy will outperform the rest of the nation in coming decades due to the proposed multi-billion dollar Olympic Dam mine expansion, BHP said today.

BHP Billiton president uranium and Olympic Dam development Graeme Hunt said a report prepared by Deloitte showed the five-stage mine expansion would boost the South Australian economy by 9 per cent by 2040.

Mr Hunt, speaking at an American Chamber of Commerce in Australia lunch in Adelaide, said according to the report, the expansion of the copper, gold and uranium mine would boost the State's economic growth and productivity beyond the national average.

"Overall, this project is of great importance to South Australia's future,'' the report says.

"It is no exaggeration to suggest that the Olympic Dam expansion has the potential to effect a transformation in the State's economic performance.''

BHP refused to release the report, which will be part of the environmental impact statement for the proposed expansion. The EIS is being finalised now before being released in about April next year.

Mr Hunt confirmed however, that BHP does not plan to build another copper smelter at Olympic Dam, but will export the additional concentrate produced to smelters overseas.

"On-site smelting has a high capital cost and increases project execution risk, particularly in the isolated area in which Olympic Dam is established, while adding comparatively little to value of the product,'' he said.

"More than 80 per cent of the value add from this expansion, and it will be very significant, will remain in South Australia, with the project expected to double the existing workforce.

"While we do not plan to build a new smelter at Olympic Dam, we will be building major new infrastructure including a desalination plant, possibly an on-site gas-fired power station, and a railway.''

Premier Mike Rann initially said he would refuse to support any mine expansion plan which did not keep all of the value adding smelting process in Australia.

Mr Hunt also flagged the need for more foregin workers to staff the mine, which require another 8000 or so staff during the constrcution phase.

Once it was running at full capacity, the mine was expected mine more than 70 million tonnes of ore per year, for more than 100 years.

BHP does not expect to be in a position to make a decision on whether to approve the mine expansion before early 2010.

[UrbanSG]

2040, that's not long at all

How times change re the smelter and the government reaction, from the Australian:

BHP abandons plans for the new smelter at Olympic Dam
Gavin Lower | October 18, 2008

BHP Billiton has ruled out a new smelter for its proposed expansion of the Olympic Dam mine in South Australia.

The announcement represents a blow to the South Australian Government's hopes to maximise employment and value-added investment at the vast project.

BHP's president of uranium and Olympic Dam development, Graeme Hunt, said in Adelaide yesterday the company had given "very careful consideration" to processing options at the copper, uranium and gold mine, 560km north of Adelaide. He said that the mine had sufficient processing facilities to handle all output.

"BHP Billiton proposes to change this in the expanded operation, with some of the product to be sold as concentrate rather than refined metal," he told a capacity audience at the American Chamber of Commerce in Australia lunch.

"The rest obviously will continue to be processed through expanded facilities.

"The copper industry norm is to sell concentrate to the international copper concentrate smelting market.

"On-site smelting has a high capital cost and increases project execution risk, particularly in the isolated area in which Olympic Dam is established, while adding comparatively little to value of the product.

"While we do not plan to build a new smelter at Olympic Dam, we will be building major new infrastructure, including a desalination plant, possibly an on-site gas-fired power station, and a railway."

Last year South Australian Premier Mike Rann reacted angrily to news that BHP planned to send copper concentrate overseas for processing.

Back then, Mr Rann said offshore processing was "not on" because he wanted more jobs to go to South Australians.

Yesterday a state Government spokesman said the fact that BHP was not going to build a second smelter was not "news to us". He said the Government wanted as much processing to remain in South Australia as possible.

"It has always been our (desire) to have as much processing here as possible," he said.

Mr Hunt urged the audience to be patient for announcements on the expansion of the mine.

He said work on the environmental approval process would carry on through 2009 but the earliest consideration of the environmental impact statement would "probably" be in the first few months of 2010.

"Within BHP Billiton there is great anticipation about the opportunity this asset gives us. While our studies will need to continue for some time yet, this will ensure that the decisions we make will stand the test of time -- and that needs to be a very long time in the case of Olympic Dam."

The mine has the world's largest uranium deposit, the fourth-largest copper deposit and fifth-largest gold resource.

[Wayno]

How times change re the smelter and the government reaction, from the Australian:

BHP abandons plans for the new smelter at Olympic Dam
Gavin Lower | October 18, 2008

BHP Billiton has ruled out a new smelter for its proposed expansion of the Olympic Dam mine in South Australia.

The announcement represents a blow to the South Australian Government's hopes to maximise employment and value-added investment at the vast project.

This is not a done deal by any stretch of the imagination. I'm expecting more jockeying for position between the SA Govt & BHP, esp for the uranium side of the equation which is *almost* more important to SA than the possibility of a minerals smelter. There's sooo much more potential for SA in the uranium processing business (lots of interesting job prospects). Let some other country have the dirty blue-collar copper/gold smelter jobs i say...

[UrbanSG]

Hopefully something interesting is announced on Friday as opposed to the usual repeated information going around recently. Article from the Australian today:

Swan visits Pilbara ahead of iron rail decision
Matt Chambers | October 27, 2008

TREASURER Wayne Swan made a hushed visit to the Pilbara yesterday as he prepared to rule on the rail access dispute....

...It is understood that Mr Forrest was to attend the Treasurer's visit to Fortescue's operations.

The visit comes as BHP prepares to take investors on a week-long tour of its nickel, North West Shelf and Olympic Dam operations. The trip culminates on Friday with a long-awaited update of the Olympic Dam expansion, though no development cost estimate is expected.

[skyliner]

Urban SG - the red print section of your last post also in the AFR P21 today but much expanded. The entire article focussed on the expected expansion info - some econ. analysts putting the expansion equivalent to $32bn. Info will be in AFR for sure by week's end.

From the article it's not a matter of IF but the time period over which the development takes place. Still negative about the smelter.

Can't wait to see it. Will put it up here once I get it. (if not beaten by Wayno!).

SA - STATE ON THE MOVE

[Wayno]

Can't wait to see it. Will put it up here once I get it. (if not beaten by Wayno!).

you'll probably beat me to it i'm traveling and snowed with work at the mo...

[Professor]

In yesterday's FR they said that the expansion details for ODX (phasing etc) will be delivered at a BHP dinner in Adelaide on Thursday night followed by a tour to the mine site on Friday. This is part of the BHP roadshow that is showing off its Australian mine operations and potential expansion (mainly in WA and here).

[UrbanSG]

The harsh reality of the current economic climate, even for a mining related company.

I think our 'mining boom' might go through a downturn thanks to the current economic climate before we really see a true 'boom' in the next cycle. Real shame about the timing of this credit crisis for South Australia. At least WA and Qld got a lot out of existing mines over this recent boom cycle.

From The Australian website:

Mining company Boart Longyear cuts 55 jobs in Adelaide
Valerina Changarathil | October 30, 2008

MORE than 50 workers at mining services company were made redundant this morning due to the "changing business environment".

Mining services provider Boart Longyear informed workers of its decision today, which is part of its global restructuring plan to make 150 jobs redundant at its US and Adelaide facilities, The Advertiser reported.

Boart Longyear's spokesperson Kent Hoots told The Advertiser all 55 permanent employees in the manufacturing and production area would be paid for today and compensated as part of the collective agreement under the Industrial Relations Commission.

"The move affects a cross-section of workers, some that are new and some that have been with us for many years," Mr Hoots said.

The US-based company - with 10,000 employees worldwide - provides drilling products and services to the global mining industry, besides a substantial presence in the water exploration, environmental and oil sands exploration sectors.

"The world's economies are slowing, prices for many base metals and other commodities have declined and the continuing credit crisis is severely restricting access to financing that many of our customers need, Boart Longyear's president Craig Kipp said.

[skyliner]

News from the AFR Wed. 30th Oct.P23

Looks like the ODX minerals will be railed (on a new line) to the Adelaide-Darwin line and then to Darwin instead of using Pt Bonython due to the sheer size of output. The report says the facilities at Pt Bonython are just not big enough to cope (with additional 'junior' ore miners using it as well). Looks like we missed out here.

SA - STATE ON THE MOVE

[UrbanSG]

Well not all the job news is down at the moment. This from The Age today:

John Holland says SA the growth state
October 30, 2008 - 4:29PM

Civil engineering and construction firm John Holland Group will boost its presence in South Australia in the new year with a regional office as it moves to win contracts in the state's growing mining sector.

Group managing director David Stewart said significant SA projects the Leighton Holdings Ltd subsidiary wanted to be involved in included a desalination plant and BHP Billiton's massive Olympic Dam copper-uranium mine expansion.

Mr Stewart told a business briefing the company had expressed interest in participating in the expansion and expected to get on the tender list.

"We've done a lot of preparatory work and completed the pre-qualifications for all of the work at Olympic Dam," Mr Stewart said.

"There are significant opportunities coming through in South Australia in the mining sector and other areas (such as) government infrastructure.

"We feel the state has a lot of growth coming along.

"If you're not there, if you're not in the market, you're not really part of the game."

SA's government has been praised in recent years for providing a favourable environment for resources developments, particularly through its Plan for Accelerating Exploration grants.

With the mining boom well and truly waning, such initiatives are increasingly being held up by industry commentators as a model to emulate in other states.

Mr Stewart said other opportunities in SA included defence sector contracts and work on the new Marjorie Jackson-Nelson Hospital in Adelaide.

He said John Holland had benefited from the residential construction "recession" because workers had migrated to the civil construction space.

"It's a boom time for civil infrastructure."

He said the company was selective and focused in targeting projects, looking for short term benefits and avoiding projects that could require lengthy approvals processes.

[UrbanSG]

Part of an article from The Australian today re BHP update:

Mr Kloppers was due to dine last night in Adelaide with the 33 analysts who have been touring BHP's operations for the week.

The analysts' tour today takes in BHP's Olympic Dam copper/gold/uranium project in South Australia's far north. They are to be briefed on BHP's controversial staged expansion plans for the project.

It is controversial because the plans do not include full processing of the mine's ore in SA. Rio would like to know what the expansion will cost, given BHP's bid is a scrip offer. No capital expenditure update is expected.

[Wayno]

BHP Says First Stage Olympic Dam Expansion On Line In 2013

http://www.tradingmarkets.com/.site/new ... s/1984634/

MELBOURNE, Oct 30, 2008 BHP Billiton Ltd. (BHP) said Friday it plans to have the first of five planned stages of expansion at its Olympic Dam mine in South Australia in production by 2013.

BHP said it plans to issue its environmental impact statement for the project to the South Australian state government before the end of 2008 with approval to take between 12 and 18 months and likely in 2010.

The Melbourne-based miner said development of the planned open pit operation at Olympic Dam will take five years.

The first stage involves optimization of the underground mine which is expected to increase copper output to a rate of 200,000 tons a year and uranium output to 4,000 tons ahead of the major open pit expansion taking output to 730,000 tons of copper and 19,000 tons of uranium.

Finally starting to see some firmer information!

[UrbanSG]

Here it comes, check out this pdf document on smh site, has mine maps/diagrams etc:

http://newsstore.smh.com.au/apps/previe ... 0898026BHP

Direct to the pdf:

http://newsstore.smh.com.au/apps/previe ... 6BHP&f=pdf

[UrbanSG]

Check out the estimated final pit pg 52!!!!

It is freaking massive even compared with Escondida, over a kilometre deep and well in excess of the size of Adelaide's CBD wide!!!!!

I know it is along way away but it is amazing.

[Wayno]

Check out the estimated final pit pg 52!!!!

It is freaking massive even compared with Escondida, over a kilometre deep and well in excess of the size of Adelaide's CBD wide!!!!!

I know it is along way away but it is amazing.

OMG - that's a massive hole! i'll certainly be buying all weekend newspapers - there should be several good articles to read...