BHP sets foundation for Olympic Dam expansion

BHP's Olympic Dam mine in South Australia. Source: BHP

BHP has recorded another round of promising results during the third phase of Oak Dam exploration drilling in South Australia, cementing the prospect as a long-term growth opportunity for the Olympic Dam copper mine.

According to BHP’s operational review for the September 2020 quarter, Oak Dam assays confirmed further high grade mineralised intercepts of copper with associated gold, uranium and silver.

Assay results from 12 of the 14 drill holes delivered between 0.24 and 4.20 per cent copper, with resource definition drilling to commence in the first half of 2021.

BHP reported that the results at Oak Dam would help unlock the full potential of Olympic Dam.

“The long-term opportunity for Olympic Dam is unchanged, with our enhanced understanding of the resource in the Southern Mine Area and the promising results from Oak Dam providing strong foundations for unlocking the full growth potential of this asset,” BHP stated.

BHP chief executive officer Mike Henry also highlighted a significant production increase at Olympic Dam, with 52,000 tonnes of copper for the September 2020 quarter, up 47 per cent on the corresponding period.

“In Australia, Olympic Dam delivered its best quarterly production in the past five years and we are on track for first (iron ore) production from South Flank (in the Pilbara) in the middle of the 2021 calendar year,” he said.

“BHP has started the new financial year with a strong first quarter of safety and production performance. Group production rose 2 per cent from a year ago driven by solid results in metallurgical coal and iron ore, our major growth projects made good progress, and we secured more options in copper, nickel and oil.

“In copper, we secured an option agreement in the Northern Territory in Australia and saw further promising exploration results from Oak Dam. We bolstered our nickel options with an exploration alliance in Canada and completion of the Honeymoon Well acquisition.”

While Oak Dam has demonstrated a positive outcome for BHP in the September quarter, the company has put an end to its $US2.5 billion ($3.5 billion) Olympic Dam Brownfield Expansion (BFX) project.

The company stated it would “continue to study options for expansion” at Olympic Dam, but decided to aim for targeted debottlenecking investments, plant upgrades and infrastructure modernisation instead.

“Following more than 400 kilometres of underground drilling associated with the Brownfield Expansion (BFX) project studies, we have improved knowledge of the ore body’s variability,” BHP stated.

“This has provided challenges for the economics of the BFX project, and we have decided the optimal way forward for now is through targeted debottlenecking investments, plant upgrades and modernisation of our infrastructure.”

BHP will aim to complete its asset integrity program over the next two years to underpin copper production at Olympic Dam.

Overall copper production ore by 4 per cent in September 2020 compared to September 2019.

“With a period of uncertainty to navigate, our efforts to be safer, more reliable and lower cost are as important as ever,” Henry said.

“We are alive to the challenges ahead but we look forward with confidence in our people and our strategy.”

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