BHP Billiton Ltd's multi-billion-dollar expansion of the Olympic Dam mine in South Australia could be delayed at least two years due to the economic crisis, an analyst says.
BGF Equities director Warwick Grigor said on Monday the downturn in global economic and commodity markets was likely to delay the Olympic Dam expansion.
"Olympic Dam is probably going to slip by at least two years in its timetable, if not longer," Mr Grigor told reporters in Adelaide.
Mr Grigor suggested BHP Billiton may be better off making acquisitions rather than expanding the mine in the current economic climate.
"We really don't know where the end of the tunnel is in terms of this economic crisis and it would be very brave of BHP to be throwing a lot of money at that when they can buy so many other bargain-basement assets around and extend their power that way," Mr Grigor added.
The world's biggest mining company was aiming to have the first stage of its five-phase Olympic Dam expansion in production by 2013, according to a BHP Billiton presentation released in October.
This phase was to optimise the existing underground operation and increase production capacity to 200,000 tonnes of copper, 4,500 tonnes of uranium and 120,000 ounces of gold.
A BHP Billiton spokeswoman said on Monday the "company hadn't updated the timetable" since the October presentation.
But activity at the project had been scaled back, she said.
In January, BHP Billiton said it would scale back the project activity at Olympic Dam because of the downturn and while the company awaited government approvals for the environmental impact statement.
The approvals could take about 12 to 18 months to complete.
BHP Billiton's last capital cost estimate for the expansion was $US6 billion ($A9.16 billion), but some analysts suggest that figure could now be as high as $US20 billion ($A30.53 billion).
Olympic Dam is about 560 kilometres north of Adelaide and houses the world's largest known uranium resource, the fourth largest copper deposit and the fifth largest gold deposit.
The mine has a capacity to produce 180,000 tonnes of copper and 4,000 tonnes of uranium per year, with the staged expansion looking to increase copper and uranium output to 730,000 and 19,000 tonnes, respectively.
BHP Billiton has cut 200 jobs from its Olympic Dam expansion team and last Tuesday flagged a further 85 job losses at the mine.
They are part of a 6,000 total to be slashed across its global operations, with about half of those in Australia.
Source: WA Today
No comments:
Post a Comment