Elsewhere in the report, Escondida (Chile) has a quoted Capital Intensity for expansion of between USD$17k-USD$29k per CuEq tpa. I am expecting that any Oak Dam development would need to be of 100,000 tpa CuEq at least (possibly 2-3 times that) to justify itself (in terms of scale to BHP, and because of depth and moderate grades released so far). So at Escondida rates, 100,000 tpa would have development costs between about AUD$2.5B and AUD$4.3Billion. I expect that this is very much at the low end, because of depth, and Australian labour rates. So this may be a challenge to "get up" and get to FID, but perhaps attractive given the potential resource size and multi-decade life if higher grades are identified near the top and BHP continues to have a positive view on Cu price. There is certainly some leverage with Aust and SA governments for not putting obstacles in the way, given BHP has international options. I do hope it can get up.
BHP Price at posting:
$41.35 Sentiment: Hold Disclosure: Held
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