BHP to boost copper output, lower costs at vast Olympic Dam
The Olympic Dam is the fifth largest copper mine in the world, and the No.1 uranium deposit. (Image courtesy of BHP Billiton)
World's largest miner BHP Billiton (ASX, NYSE:BHP) (LON:BLT) has made a bold bet on copper and it's starting by finding a way to boost output for the red metal from its Olympic Dam, Australia's biggest underground mine, even before a proposed and long-awaited mega-expansion of the operation takes place.
While the company will take another three years before deciding if heap leaching technology will ultimately allow a big expansion of the mine, the fifth largest copper deposit in the world, and the No.1 uranium deposit, BHP wants to up output for the industrial metal from the mine by 40% over the next year.
BHP wants to up output for the industrial metal from its Olympic Dam by 40% over the next year.Speaking ahead of the first anniversary next week of her appointment as BHP's asset president of Olympic Dam, Jacqui McGill warned the current smaller-scale stepping up of production won't allow the mining giant to fully maximize the sweet spot of global copper demand.
As costs decrease, however, McGill says she is in a position to fight for funding to eventually double the tonnes mined to around 450,000 tonnes from 2025.
"I think at a dollar a pound we've earned a seat at the table," McGill said according to Reuters.
Jacqui McGill on site at Olympic Dam. ( Aaron Bunch | BHP Billiton)
She is also planning to step up hiring. The mine is now advertising for 120 workers, 50 of which are newly created roles. This, as BHP first pursues a more sedate underground mining push into the large, untouched part of the ore body originally earmarked for a massive $30 billion open pit.
McGill said there would be no "big bang" hiring, but rather gradual growth.
"We'll do it in a sustainable way," she told The Courier Mail.
The operation has already improved the number of copper units produced per employee by more than 40% over the past two years, after cutting its workforce by 36%.
Olympic Dam has about 470 km of tunnels and plans to drill a further 120 km over the next five years to open a new underground seam that will give it some of the richest ores in the world.
BHP hopes to improve the grade by around 20% to more than 2.2% copper within by 2021 - compared to average grades of less than 1% anticipated elsewhere by then.
That would position Olympic Dam, which is at the heart of BHP's new strategy to grow its output of copper and oil, to be able to hike output from 200,000 tonnes this year to 230,000 tonnes by 2021.
The mine has been operating since the late 1980s but still has 70% of its resource untouched.