UPDATE: BHP Billiton’s Olympic Dam – To Go, Or No Go?
The slowing global economy could potentially affect the construction and start-up operations of BHP Billiton Ltd.'s $20 billion expansion into the Olympic Dam copper, gold and uranium mine.
On Monday night, executives of the Australian mining giant met with South Australian government and opposition leaders to thresh out concerns as the board of BHP Billiton Ltd. discusses on grating the ultimate approval that will push the multi-million Olympic Dam mine expansion and development.
SA Premier Jay Weatherill earlier said he had hoped BHP Billiton Ltd.'s approval would be released by middle of this year. However, Mr Weatherill was also quick to acknowledge the present and real danger affecting the world's economy will likely push the board of the Australian miner to pause and stall its decision.
"That's a concern of course but some of the considerations about a 50-year mine don't really bear on the current ups and downs of the economic cycle," he said.
"So we're hopeful that short-term economic foundations won't weigh heavily on their minds when they make this decision, but ultimately it will be a decision for the board for a project that has a very long lead time and a very long period of payback."
On one hand, the state parliament passed in 2011 the legislation to enable the expansion of the world's largest open-cut mine, which is expected to generate up to 6,000 new jobs during its 11-year construction phase, with 4,000 more operational jobs along the way.
SA deputy opposition leader Mitch Williams, on the other hand, remained confident BHP Billiton Ltd. will remain true to its commitment to expand the Olympic Dam copper, gold and uranium mine, claiming the Australian mining giant would have been likely already attentive and monitoring of the slowing global economic situation the time it signed the Olympic Dam indenture agreement in 2011.
"The decision that BHP Billiton have already taken over the last 12 months were taken pretty well in knowledge of the world economic climate," he told AAP.
"Most of what we've seen around the world today has been reasonably evident since the 2008 GFC."
Meanwhile, Tom Koutsantonis, Minister for Mineral Resources and Energy said in a statement on Monday that the $25 million construction works to upgrade the Stuart Highway in preparation Olympic Dam project have already began. The upgrade is part of the $1.2 billion pre-commitment investment by BHP Billiton Ltd. ahead of approval for the expansion project.
"We have seen some very substantial contracts let . . . that does give us some cause for confidence because the company has been prepared to make $1.2bn in commitment even before making its decision," Mr Weatherill said.
BHP Billiton will spend a further $525 million in South Australia by the end of July.