BHP aims to make a decision about a $2.76 billion expansion of Olympic Dam in the next few years

BHP is considering a $2.76 billion expansion at Olympic Dam which it expects to make a decision on by mid 2020.

BHP expects to see employment at the Olympic Dam mine in Far North South Australia “building steadily” as it nears a decision on a $2.76 billion expansion at the huge operation.

The company currently employs about 3500 people at the copper, gold and uranium mine, which is currently undergoing both a large smelter upgrade and the first of three proposed expansions.

The second, $US2.1 billion expansion will go before the BHP board for sign off in mid-2020.

Jacqui McGill, asset president Olympic Dam, yesterday told an analyst briefing in Adelaide that the company was well into the first phase of a possible three phase expansion, with $1 billion being spent over the next four years.

The first phase — the Southern Mine Area — will increase production to 230,000 tonnes of copper by 2020.

The mine produced 166,000 tonnes last financial year which is expected to drop to 150,000 this year due to the smelter upgrade.

The second phase of the project — brownfield expansion or BFX — would cost $US2.1 billion with the company currently running the numbers on the project with a view to making a decision on going ahead in mid-2020.

That phase would take production to 330,000 tonnes by 2023.

A third phase of expansion — the Olympic Dam Expansion Project, or ODEP — was in the early planning stages and could more than double production from SMA levels to 450,000-500,000 tonnes of copper per year.

Ms McGill said it was too soon to talk specific job figures for the 2020 expansion project but there would be increases.

“The brownfields expansion project (BFX) will go for approval in the middle of calendar year 2020, we’ve got a bit of time before we can make the connection and further announcements regarding employee growth but see that building steadily between now and FY20,’’ Ms McGill said.

“Current estimates put the OD resource in excess of 120 million tonnes of copper equivalent. At current production rates, it would take around 500 years to deplete.’’

BHP earlier this month advertised for another 120 staff to join the company over the next year.

Ms McGill said BHP had 30 megawatts of power generation capacity on site and would be able to weather a power outage, but said “we don’t see a repeat” of the statewide blackout which cost the company $US105 million last year.

The company also said yesterday its power costs at Olympic Dam had doubled since 2014-15.

BHP minerals Australia president Mike Henry said longer term a national solution to power affordability was necessary and the company supported the recently announced National Energy Guarantee as a way to move in that direction.

Jacqui McGill, Asset President of Olympic Dam, BHP. Picture: Aaron Bunch/BHP.