BHP Billiton approves an optimistic $1.2bn for mine expansion
BHP Billiton on Wednesday approved $1.2 billion in pre-commitment capital to start expansion work on its Olympic Dam copper and uranium mine, which analysts estimate could nearly cost 30 times that much to develop fully.
The funds will be used to buy trucks, build worker housing and for other items requiring lengthy lead times, it said.
BHP said it will not make a final decision to go ahead until mid-2012, after it weighs up the 150 environmental conditions imposed on the project by the national and South Australia state governments this week.
Once fully developed, Olympic Dam would almost be on par with the massive copper mines of South America, although it would take years before the mine came close to matching the output of BHP's giant Escondida lode in Chile.
"The Olympic Dam project team is completing studies to create one of the world's largest open pit mines, with the potential to increase copper production from around 180,000 tonnes per annum to 750,000 tonnes per annum and beyond," BHP Chief Executive Marius Kloppers said in a statement.
BHP has not given a total cost estimate for the project but analysts say it will need $20 billion to $30 billion to fully develop the lode.
