InDaily InDaily

Support independent Journalism Donate Subscribe
Support independent journalism


Olympic Dam heap leach expansion low on BHP’s radar


The expansion of Olympic Dam using heap leach technology is among the higher-risk and lower-return projects on BHP’s radar, the mining giant told investors today.

Print article

BHP released its annual results this morning, including a presentation to investors that ranked 16 “attractive opportunities”, based on risk and return.

The proposed expansion of Olympic Dam associated with heap leach technology – trials of which the multinational mining company successfully completed in June – ranked among the higher-risk, lower return projects on its radar.

BHP has been testing the heap leaching since it dumped plans for a $US30 billion expansion Olympic Dam in 2012, saying the process has the potential to double the underground copper mine’s output.

The Olympic Dam expansion project, referring to the use of heap leach technology (highlighted) is among higher risk, lower return projects on BHP’s radar.

The company’s preliminary final report, released this morning, showed revenues from Olympic Dam – located 560 kilometres north of Adelaide – had increased from $US1.3 billion in FY 18 to $1.4 billion in the year to 30 June 2019.

Speaking to investors this morning, BHP director Andrew McKenzie said that “at Olympic Dam, while the surface operations have experienced challenges, underground development has progressed well with record kilometres drilled”.

“We have made good progress to catch up on maintenance, and our plans are firmly focused on asset stabilisation and medium term growth.

“While there are bright spots in underlying performance at Olympic Dam, the team there is focused on delivering a multi-year program of work to improve stability; and growing production through access to higher grade ores and increased throughput.”

He added: “Both are key to improving returns.”

In February, the Marshall Government granted major project status to the proposed $3 billion BFX expansion of Olympic Dam – which the company describes as distinct from the longer-term proposed expansion project associated with the heap leach technology.

The BFX expansion would involve increasing output of copper from 200,000 tonnes a year to 350,000 and boosting the level of gold, silver and uranium production.

The use of water from the Great Artesian Basin would be increased to up to 50 megalitres a day.

Profit surge and a record dividend

Meanwhile, BHP announced this morning that it more than doubled its full-year net profit from $US3.70 billion in financial year 2018 to $US8.31 billion ($A12.27 billion) in FY 2019.

The profit surge comes on the back of strong iron ore prices and easing losses associated with the 2015 Samarco dam disaster.

The miner also announced announced a record final dividend of 78 US cents per share, up from 63 US cents a year ago, for a full-year dividend of $US2.35 per share.

BHP said the final payout was on top of a record US$17 billion it had already returned to shareholders in FY19.

Mackenzie said the full-year result would provide the company with the momentum needed to prosper, even as the trade war between China and the US weighs on commodity prices.

“We continue to enjoy strong sales to China … but while (the tension) continues it is putting a bit of a dampener on world economic growth,” Mr McKenzie said.

“I believe we have built a company that will survive and will prosper.”

BHP said it expected China’s economic growth to slow modestly but the company believed the impact of weaker exports would be partially offset by easier monetary and fiscal policy.

“Over the longer term, we expect China’s economic growth rate to decelerate as the working age population falls and the capital stock matures,” BHP said in its release to the ASX.

Mackenzie said BHP’s review of its thermal coal segment was continuing but repeated the company did “not intend to invest to grow these businesses”.

In July, Mackenzie announced BHP was spending $US400 million to create a climate investment program to reduce emissions from its own operations as well as those generated from its resources.

BHP’s revenue from continuing operations rose 3.0 per cent to $US44.3 billion, with higher commodity prices and record production from several sites offset by the impacts of Cyclone Veronica in Western Australia, resource headwinds and unplanned outages in the first half of the year.

Strong iron ore prices helped deliver $11.1 billion in pre-tax earnings for the segment, which was nearly half of the $23.2 billion in pre-tax earnings achieved across the group.

Exceptional losses associated with the Samarco incident eased to $US818 million from $US5.2 billion a year ago.

BHP’s ASX-listed shares dropped by 1.6 per cent to $35.67 within the first 30 minutes of trade on Tuesday, still 7.5 per cent higher than $33.17 a year ago.

– with AAP


Make a comment View comment guidelines

Local News Matters

Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to help InDaily continue to uncover the facts.

Donate today
Powered by PressPatron

More Business stories

Loading next article