Shortly after a month that it announced it is cancelling the $30-billion expansion of the Olympic Dam copper and uranium mine mega project, global mining giant BHP Billiton has asked the state government of South Australia to extend the deadline coverage of the indenture agreement the two parties signed in October 2011.

Tom Koutsantonis, SA mineral resources and energy minister, revealed BHP representatives led by BHP's head of uranium, Dean Dalla Valle, met with him on Wednesday to formally submit a request for extension to the deadline for approving the expansion. From Dec. 15 this year, BHP asked that the deadline be moved to October 2016.

"I won't be making any public comments about whether we will accept that request or not other than to say I will be carefully considering it," Mr Koutsantonis told reporters.

"Obviously what the request means is that BHP is serious about staying in South Australia developing that asset and that mine.

"What they are debating is how they will do that, what it will cost to do that."

New Technology

The 46-month extension, the miner argued, will enable the company to complete studies into new processing technology as well as source "an alternative, less capital-intensive design of the open-pit expansion that has the potential to substantially improve the economics of the project."

The indenture for the $30 billion Olympic Dam copper and uranium mine mega project expansion will expire in December. It locked in generous royalty rates for 40 years.

"I think a lot of South Australians were shaken to the core when BHP decided not to approve the expansion of the mine," Mr Koutsantonis said.

"But I think this is a symbol that BHP have deep roots in South Australia and aren't going to leave $1 trillion lying in the ground," he noted.

"Ultimately now it's a conversation with BHP. I've received an initial letter, I'm going to require some more information. Obviously I'll be taking a lot of Crown Law advice."

In August, BHP confirmed it is cancelling the expansion of the Olympic Dam on prevailing global market conditions. But it did say that it would revise and work on a cheaper design for the open-mine pit's expansion.

"Getting this new technology right means millions if not hundreds of millions of dollars spent here in South Australia because to extract that trillion-dollar ore body they're going to need to use a new type of ore. That new type of technology is being developed here in South Australia and that's a good thing," Mr Koutsantonis said.

Renegotiate the Terms

SA Greens Leader Mark Parnell advised the state government should renegotiate the terms of the indenture agreement for an improved deal once it lapses in December.

"They're not intending to fulfill the deal by the end of the year and that means that all bets are off," Mr Parnell said. "The South Australian Government doesn't have to sell out our resources to the first bidder that comes along."

"What we need to be doing is negotiating a better deal for our resources, one that guarantees higher royalties, local jobs and processing."

Mr Koutsantonis said the extension may not be easily given on a silver platter.

"We're consulting with the Premier and the cabinet. I've called the leader of the opposition, the deputy leader of the opposition and the leader of the opposition in the upper house. I'll be consulting with the parliament, I'll be consulting with a wide range of stake holders, ultimately the government will make a decision in the best interest of South Australia."