BHP has awarded a major contract supporting its proposed Olympic Dam refinery expansion

BHP has awarded a $40m contract to progress the proposed expansion of its copper smelting and refinery facilities at the Olympic Dam operations in South Australia’s Far North.

BHP’s Olympic Dam operations in South Australia.

BHP has awarded a $40m contract to progress the proposed expansion of its copper smelting and refinery facilities at the Olympic Dam operations in South Australia’s Far North.

A joint venue between Fluor Australia and Hatch has been awarded the engineering, procurement and construction management (EPCM) contract, which will be executed in stages as BHP progresses towards a final investment decision on the smelter and refinery expansion in the first half of the 2027 financial year.

“The first stage of EPCM activity represents more than $40 million of investment to lead overall strategy and planning through the project’s study phases,’’ BHP said.

BHP last year announced it was examining increasing copper production in South Australia to more than 500,000 tonnes of refined copper cathode per year by the early 2030s, and as much as 650,000 tonnes by the mid-2030s, up from about 322,000 tonnes now.

The global miner operates the Olympic Dam polymetallic mine as well as the Carrapateena and Prominent Hill copper mines in SA, and is conducting ongoing work to develop the large Oak Dam deposit.

Copper ore is refined into cathode at the Olympic Dam refinery.

BHP group procurement officer Rashpal Bhatti said the selected companies had significant shared experience in delivering “mega projects’’.

Inside the Olympic Dam refinery.

“The growth potential for Copper SA is exciting and this first stage of EPCM works will be key as we progress the proposal for an expanded copper smelter and refinery at the heart of South Australia’s growing copper province towards a final investment decision,’’ Mr Bhatti said.

“It is critical that we prudently manage our spending to achieve the vision that BHP shares with many others to grow copper production in South Australia, and we have worked closely with Fluor and Hatch on a contract structure that supports this.”

BHP has talked up its focus on copper in recent years, with recent falls in the price of iron ore highlighting the importance of increasing diversification for the miner.

The company last month reported that it had shipped record tonnes of iron ore from Western Australia in the six months to December 31, but the price it fetched for the steelmaking ingredient had plunged 22 per cent year on year.

The price fall, from $US103.70 a tonne to $US81.11 a tonne as the Chinese property market faltered, means BHP will report a big drop in iron ore earnings partly offset by the rise in copper when it releases half-year results later this month.

In copper, volumes were up 10 per cent as prices firmed year on year and the Escondida mine in Chile achieved a 10-year production record.

The performance of Escondida made up for a two-week outage at Olympic Dam after wild electrical storms hit SA in October. BHP has flagged a $US150m earnings hit from the outage.

Originally published as BHP has awarded a major contract supporting its proposed Olympic Dam refinery expansion