BHP will look to boost copper production from South Australia by 50 per cent

BHP is assessing the viability of a major boost to copper production from its operations in South Australia, but it won’t happen overnight.

BHP’s Olympic Dam operation in South Australia’s Far North. Picture: Supplied

BHP is looking at options to boost its copper output in South Australia to more than half a million tonnes per year after the Olympic Dam mine turned in record production of copper and gold in the past financial year.

The possible expansion would include expanding to a “two-stage smelter”, with the company having a vision to create a central processing hub for its mines in SA.

BHP’s “Copper South Australia” division now includes the Carrapateena and Prominent Hill mines it acquired when it bought OZ Minerals earlier this year, its major Oak Dam discovery as well as the Olympic Dam operations at Roxby Downs.

The company is assessing the potential of increasing its smelting capacity more than threefold and said on Tuesday there were economies of scale from operating at a larger capacity.

There are also understood to be benefits to be gained from blending the ores from the different mine sites, which helps with the chemistry of the processing operations.

The Copper South Australia division made a net profit of $US166m for the past financial year, up from a $US9m loss in the previous period.

Revenue came in at $US2.8bn, up from $US1.8bn, with 232,000 tonnes of copper produced.

The possible expansion would be timed to coincide with the company’s next scheduled smelter shutdown, with a timeline published by the global miner on Tuesday showing studies would continue until about early 2026, with a final investment decision possible towards the latter half of the 2026-27 financial year.

Production from any expansion would not begin until FY30.

The company is expecting its SA assets to produce 310,000-340,000 tonnes of copper this financial year, however this number will include a full contribution from its new mines so is not directly comparable to last year’s result.

“Olympic Dam delivered record BHP copper production as a result of continued strong concentrator and s,melter performance following the major smelter maintenance campaign in the prior period,’’ the company said.

“Record annual gold and silver production was also achieved following the implementation of debottlenecking initiatives in the prior period, 27 per cent higher than the previous gold production record.’’

At the company’s Oak Dam discovery near Olympic Dam, BHP said it received approval from the State Government in March for the next phase of exploration, and currently had nine drill rigs operating with that number to increase to 11 by the end of the year.

“BHP is also installing a 150-room accommodation village and support facilities adjacent to the drilling target area,’’ the company said.

BHP on Tuesday reported its full year profit result, and cut its final dividend by more than half from last year’s record payouts, declaring a US80c a share final dividend on the back of a $US12.92bn annual profit.

The mining giant said it had recorded an underlying net profit of $US13.4bn, with one-off items of $US411m dragging down its statutory result.

The result is down 58 per cent from last financial year’s record $US30.9bn profit, with its underlying results slightly above analyst expectations.

The US80c a share final dividend is less than half of the $US1.75 final payout in 2022. Including BHP’s US90c interim dividend, the company will have returned $US1.70 for the full year.Analyst consensus had expected a $US1.72 total payout for the financial year.