Changes in the mining plan at BHP Billiton Group's Olympic Dam in South Australia could ramp up copper outputto 280,000 tonnes per annum at CapEx of less than US$500 million, The Australian Financial Review reportedApril 6.
The mining giant previously targeted to raise production at theproject to 255,000 tonnes within five years, and without significant capital spending.
The new plan targets the southern system, which would have beenmissed under the previous plan that focused on the copper-rich super pit. The southernsystem's target zones are richer in copper and other credit minerals — gold, silverand uranium — but also has around 20% less sulfur. This means less cost becauseof the lower amounts of contaminants that need to be extracted.
Olympic Dam is on track to beat this year's output guidance of 200,000 tonnes, up from180,000 tonnes in 2015. Targeted production by 2019 is 220,000 tonnes.
The additional copper tonnes would come just in time for whatDaniel Malchuk, president of BHP Billiton's copper business, called a "structuralsupply deficit" by 2020.
The miner expects copper prices to remain depressed for the nextthree years, but is confident of a recovery in 2019 when the market shifts to a"total undersupply situation."
BHP Billiton's other growth option is the Chile-based copper project, at whichthe company indicated that it will carry out a 50-year expansion in December 2015.The company estimated Spence's development cost at US$2.2.
The project is due for a review by the board within 18 months.If approved, the expansion could come online by 2020 and contribute 200,000 tonnesper annum in its first decade.