The Australian government will seek to help BHP Billiton Ltd, the world’s largest mining company, to pursue an estimated US$33 billion expansion of its Olympic Dam mine, which was shelved after metal prices declined and costs rose.
“I want to ensure that as far as is humanly possible everything that government does is directed towards making it easier, not harder, for this iconic project to go ahead,” Australian Prime Minister Tony Abbott told reporters in Sydney yesterday.
BHP said in August last year it was halting investment decisions on several projects as demand for some commodities waned and prices tumbled. Expanding Olympic Dam, located 560km north of Adelaide, would have made it the world’s largest uranium mine within 11 years and boosted the nation’s copper output.
The Melbourne-based miner may “require a technological breakthrough,” to make a larger Olympic Dam economically competitive and is still examining options for the project, BHP chief executive officer Andrew Mackenzie said in September.
The venture has an estimated cost of US$33 billion, according to Credit Suisse Group AG.
Abbott said that an eventual expansion would boost South Australia’s economy, which is facing the end of manufacturing at General Motors Co’s Holden unit. The automaker will cease production in 2017 after 69 years, cutting about 2,900 jobs at sites in the state and in neighboring Victoria.
“The Olympic Dam expansion is the best thing that could happen for the economy of South Australia,” Abbott said. “The Olympic Dam expansion, should it take place, would set South Australia up for decades, absolutely decades.”
Abbott declined to say whether he had been involved personally in talks with BHP on its plans for the expansion. BHP also declined to comment on discussions with government.