The point to note Aka is the costs associated with the OD expansion. They would need to spend billions and dig for 7 years before they even reached the orebody in the expansion pit. Given that scenario it was always going to be a line-ball decision imo. BHP have made too many costly mistakes recently and no doubt senior mngmnt didn't want to compound things in current climate.
Copper mined by CDU at low cost, near surface with excellent recovories will have no problems finding a new home!
Enormous earthmoving task for Olympic Dam expansion
by Charles Macdonald— last modified Oct 13, 2011 09:36 AM
To augment its current mid-sized underground mine at Olympic Dam with possibly the world’s largest open cut, BHP Billiton will have to engage in a gargantuan earthmoving operation.
Olympic Dam process plant.
Over six years, a teeming fleet of trucks and shovels will need to scour a layer of dirt 350 metres deep from a pit around four kilometres long and 3.5kms wide, in the process revealing the rich copper, gold, uranium and silver orebody.
Only in year seven, and after the expenditure of around $15bn, will BHP start open cut mining, lifting copper production from today’s level of around 180,000tpa in stages to 750,000tpa.
In addition to the massive pit, BHP will spend billions on a large desalination plant at Port Bonython, an extended airport and rail and power infrastructure.
CDU Price at posting:
$4.04 Sentiment: LT Buy Disclosure: Held
