olydam expansion to be a step-change

http://www.adelaidenow.com.au/business/sa-business-journal/olydam-expansion-to-be-a-step-change/story-e6fredel-1226087423432

OlyDam expansion to be a step-change
Cameron England
From: The Advertiser
July 05, 2011 12:00AM

MINING in SA will undergo a step-change if the multibillion-dollar expansion goes ahead.
IT WILL be the biggest truck order the world has seen, as well as the biggest diesel contract. And if it goes ahead this year, BHP Billiton's proposed Olympic Dam expansion will be the biggest project in South Australian history

The signs are looking positive at the moment, with copper prices high and BHP spruiking the benefits of the project via media advertisements and during the release of its supplementary environmental impact statement released in May.

The project - once labelled a mirage in the desert - is expected to cost more than $20 billion to build over several years, creating more than 15,000 jobs at its peak, and increasing the output of the mine sixfold.

The fate of the project lies with the governments of SA and the Northern Territory, as well as the Federal Government.

"We expect a decision from the three approving governments some time in the second half of this year," BHP Billiton's head of the project, uranium president Dean Dalla Valle says. "But it's really more important that we get the right steps in place than that we have a quick timetable.

"Before we can finalise the configuration for the first stage, we will need to see all the environmental conditions and approvals that will be imposed on us.

"We need to understand them - and only then can we parallel them and merge them with the mining studies and the engineering studies which are going on.

"Only then can we finalise our proposal. Our view is that if we receive a response on the EIS sometime in the second half of this year, we would have somewhere between another quarter and half-year to merge and integrate and come up with our optimised proposal.

"Then we would present that to the board for a decision early next year."

Outside the Olympic Dam project, there are at least four projects scheduled to start mining this year.

Hillgrove Resources' $120 million Kanmantoo copper project in the Adelaide Hills is expected to start production in November, generating 80-90,000 tonnes a year.

The Honeymoon uranium mine near Broken Hill is also expected to start production later this year.

The project, which is owned by Canada's Uranium One and Japan's Mitsui, is approaching first production, after which it aims to generate about 400,000 pounds of uranium oxide per year.

WPG Resources is expecting to get the final approvals for its Peculiar Knob iron ore mine near Coober Pedy this month.

The company announced last month it had let all of the major contracts for the project, which had a capital expenditure budget of $139 million plus working capital needs of $29 million.

In the absence of a new bulk commodities port in the state - a fundamental infrastructure need identified by the industry - WPG will be exporting out of Port Pirie.

IronClad Mining has also found a work-around, aiming to barge iron ore from its proposed iron mine near Kimba via Lucky Bay near Cowell to an offshore ship facility.

South Australian Chamber of Mines and Energy chief executive Jason Kuchel says there are key policy issues to be sorted out - the foremost being the Mineral Resources Rent Tax, which is scheduled to be implemented from July 1 next year.

"We're beginning to work through what it may or may not mean for iron ore, and coal and coal to liquids projects," he says.

Mr Kuchel says the Chamber understands the CTL projects will be taxed under the mining, rather than the petroleum tax regime.