Australia approves BHP's $20-$30 billion Olympic Dam mine

Mon Oct 10, 2011 3:40am EDT
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By Sonali Paul and James Regan

MELBOURNE/SYDNEY (Reuters) - BHP Billiton moved closer to an estimated $20 billion to $30 billion expansion of its Olympic Dam copper and uranium mine after winning environmental approvals on Monday for the project in the deserts of southern Australia.

The approvals give BHP the green light to nearly quadruple the mine's copper output to 750,000 tonnes annually to help feed a growing market in Asia, especially China, where copper consumption is forecast to surge 6 percent this year.

BHP, expected to make a final decision in mid-2012, now has to weigh up the 150 conditions imposed by the national and South Australia state governments as part of assessing the mine's feasibility.

Once fully expanded, Olympic Dam would be on near-par with the massive copper mines of South America, though it would take years before it came close to matching the output of BHP's giant Escondida lode in Chile.

"It'll help balance the market and to that extent it's slightly bearish, but the market's been looking at this expansion for some time," said Citigroup analyst David Thurtell.

"I'm not sure whether anyone expected the Dam to be knocked back by the government."

The national and South Australia governments are keen for the project to go ahead because of the thousands of jobs it is expected to create.

As part of the conditions, BHP has agreed to set aside a chunk of land roughly the size of London as an environmental buffer zone and to monitor the impact of the mine on birds and fish inhabiting hundreds of kilometers surrounding the Olympic Dam mine site.   Continued...

<p>A woman gestures in front of a BHP Billiton sign during a half-year results briefing by the company's Chief Executive Marius Kloppers, in central Sydney February 16, 2011. REUTERS/Tim Wimborne</p>