BHP Billiton recently announced approval of $1.2 billion in pre-commitment capital for the first phase of its huge Olympic Dam expansion project in South Australia. The announcement came two days after Australia’s national government and South Australia’s state government announced environmental approvals had been granted for the project. The majority of the pre-commitment capital was conditional on successful passage of an Indenture agreement through the South Australian parliament, BHP Billiton said.

On October 12, a South Australia government statement said Premier Mike Rann and BHP Billiton Chief Executive Marius Kloppers signed a landmark agreement amending the existing Roxby Downs Indenture to enable the construction and operation of the multi-billion dollar Olympic Dam expansion project. A bill to ratify the amendments to the Indenture would be introduced to both houses of the South Australia parliament within a week. “The Indenture amendments are the culmination of years of thorough and detailed negotiations that have resulted in the best possible deal for South Australia. It provides a solid foundation for a project that will deliver long-term prosperity to South Australia throughout the life of the Indenture,” Rann said.

The first phase of the Olympic Dam project is currently undergoing feasibility studies, and progression of the project to full development remains dependent on completion of all required studies and BHP Billiton board approval, which the company anticipates will be sought by mid-year 2012. The newly approved funding will facilitate the procurement of long-lead items such as trucks and accommodation, infrastructure development, and early site works for the first phase of the project.

A statement by South Australia’s Minister for Mineral Resources Development Tom Koutsantonis outlined the extent of the approved project. The approvals allow BHP Billiton to construct a new open-pit mine that will eventually consume the existing underground mine, with potential to increase production from 180,000 mt/y to 750,000 mt/y of refined copper, plus associated uranium oxide, gold and silver. Other operational aspects of the approvals include expansion of the existing smelter and construction of new concentrator and hydrometallurgical plants to process the additional ore; construction of a waste rock storage facility that would cover 6,720 ha and eventually reach a height of approximately 150 m; and construction of a new tailings storage facility that would eventually reach a height of about 65 m and have a total area of about 4,000 ha.

Infrastructure addressed in the environmental approvals includes a new airport to replace the existing facility at Olympic Dam;  a new gas-fired power station supplied by a new gas supply pipeline from Moomba; a cogeneration power station to supplement primary electricity supply; a desalination plant at Port Bonython connected to Olympic Dam by a 320-km pipeline; saline wellfields providing up to 50 million liters per day of water, largely for dust suppression; a new 270-km electricity transmission line from Port Augusta; a 105-km rail line connecting Olympic Dam to the national rail network near Pimba; and a rail/road intermodal freight terminal at Pimba.

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