Abbott getting behind Olympic Dam expansion again

Prime Minister Tony Abbott has reiterated his support for the Olympic Dam expansion.

Speaking yesterday, he told reporters that “I want to ensure that as far as is humanly possible everything that government does is directed towards making it easier, not harder, for this iconic project to go ahead,” according to Bloomberg.

The mine's US$20 billion planned expansion was one of the largest potential mining operations in Australia, however it was cancelled in August last year by the mine's owner BHP.

At the time is blamed the move on weak commodity prices and spiralling costs.

"As we finalised all the details of the project in the context of current market conditions, our strategy and capital management priorities, it became clear that the right decision for the company and its shareholders was to continue studies to develop a less capital intensive option to replace the underground mine at Olympic Dam," BHP's CEO at the time, Marius Kloppers, said.

"We believe [the] decision reflects an appropriate, prudent and disciplined course of action."

It stated that it may focus again on the extension by using new technology to develop the operation.

At the time accusations flew over the 'real' cause of the expansion halt, from the mining tax to the lack of support from the South Australian Government.

Despite the miner putting the expansion the backburner, the South Australian Government still gave a four year extension to BHP's Olympic Dam proposal time.

Since the CEO change at BHP the mine's development once again came back under the spotlight after BHP again sought another extension from the SA Government to expand the site.

We continue to look at new ways technologically as to how we could further expand the existing operation of Olympic Dam," newly promoted CEO Andrew Mackenzie said.

"We see a lot of potential there, but we take a long-term view and we have to find something that is economically competitive, and that does require a technological breakthrough."

However he did point to a sluggish uranium sector as increasing pressure across the sector and hamstringing the operation.

Now Abbott has thrown is support behind its future expansion.

"The Olympic Dam expansion is the best thing that could happen for the economy of South Australia," Abbott told reporters.

"The Olympic Dam expansion, should it take place, would set South Australia up for decades, absolutely decades."

However neither Abbott nor BHP stated whether they had been in talks on the mine's future or its expansion.

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