Manufacturing News

BHP gets serious about copper metal production

Manufacturing News

By Peter Roberts

BHP might just be getting serious about fully exploiting its ability to refine and export copper on a large scale from its South Australian copper mines – however the company has considered major expansions previously and baulked at the cost.

In 2012 BHP halted plans for a $30 billion expansion of its Olympic Dam copper and uranium mine and most recently in 2020 abandoned a $3.5 billion Brownfield Expansion (BFX) citing low prices for the resource.

However things have changed since then with copper firming as the key raw material for the electrification of transport and industry and BHP moving to control more of the state’s copper – Australia is the world’s second biggest source and SA is the site of 70 percent of Australia’s copper.

Since then BHP has bought the Prominent Hill and Carrapateena mines and has integrated their opereations into Olympic Dam, renewable power has become more readily accessible and the company is part of efforts to overcome one of the main hurdles to expansion – the availability of water.

Last week BHP, the state and private investors agreed to fund studies costing up to $200 million leading to a final investment decision on the Northern Water desalination project servicing BHP’s copper mines and refineries and the burgeoning green hydrogen and steel industries.

Yesterday SA Premier Peter Malinauskas outlined BHP’s rising investments in Olympic Dam:

  • 12 drill rigs and 150 people are studying a new potential ore body at Oak Dam
  • A significant exploration drilling programme known as OD Deeps deep below the existing mine at Olympic Dam has identified copper resources at a grade of more than two percent copper
  • And transfers of copper concentrate from Prominent Hill and Carrapateena are underway to the Olympic Dam processing facility for smelting and refining.

A statement issued by Manilauskas said: “BHP is assessing options for a new two-stage smelter at Olympic Dam which would more than double the capacity of the existing smelter from 0.5Mt to 1.0Mt-1.7Mt, with an ambition to lift copper production to around 500,000 tonnes a year.

“More treatment of concentrates and ores means more complexity in our economy and higher-value exports, which stands to benefit all South Australians.

“The opportunity for copper in the global economy is huge…most significantly, much of this resource is yet to be developed.”

Manilauskas said that the Northern Water Business Case found that the project would facilitate a tripling of copper mining volumes and generate a forecast $9 billion in additional royalties.

BHP is somewhat more circumspect in its enthusiasm for Olympic Dam – the company has disappointed previous SA premiers more than once and is understandably wary of building up expectations again.

In the statement Anna Wiley, BHP Asset President Copper South Australia said: “BHP has created an integrated copper province that we hope will bring the scale required to economically and sustainably produce and process more copper here in SA and deliver it to global customers.

“Our South Australian operations are performing well and we’ve had further exploration success.

“The Oak Dam exploration project is progressing with 12 rigs currently on site, 150 kilometres of drilling completed, a core processing facility on-site and 150 person accommodation camp nearly complete.

“We’re also exploring in an area below the known Olympic Dam deposit, known as Olympic Dam Deeps.”

Australia’s performance in refining and exporting metals has been lacklustre in recent years reflecting the ageing of existing facilities and a lack of confidence in the market for copper.

We know confidence has returned and BHP finds itself in the box seat to produce not only more copper, but more low emission copper in a province rich in copper and renewable energy resources.

But with BHP, history tells us not to open the sparking just yet.

Further reading:
Desalination to unlock copper, green hydrogen and steel riches

Picture: BHP/Olympic Dam

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