Investment funds applaud BHP’s decision to shelve Olympic Dam uranium mine expansion
factors hampering BHP’s ability to build massive expansion projects like Olympic Dam.
Shelving projects ‘a wise move for miners’ THE AUSTRALIAN, BY: MATT CHAMBERS AND BARRY FITZGERALD July 30, 2012 THE nation’s biggest listed investment fund and one of BHP Billiton’s top shareholders has applauded moves by big miners to shelve Australian projects because of high costs and sliding commodity prices.
Over the weekend, the most likely of Australia’s next big uranium developments, the Kintyre project in the Great Sandy desert, became the latest victim after being hit by sluggish prices for the nuclear fuel and Western Australia’s heated construction market.
The shelving of Kintyre, by Canada’s Cameco, came as The Weekend Australian revealed BHP had told outsiders of a two-year delay on a $30 billion decision due this year on expanding the Olympic Dam copper and uranium mine in South Australia’s outback.
Australian Foundation Investment Co managing director Ross Barker said the time of huge profits from very high commodities prices appeared to be coming to an end, with an “enormously large” number of Australian mining projects still on the drawing board……
The Weekend Australian revealed BHP chief executive Marius Kloppers
recently told staff an environment of high costs and falling
commodities prices would probably not end soon, China’s growth
continued to be slower than expected and development spending would
suffer as a result.
Iron ore prices, which slid to a 2 1/2-year low on Friday, below
$US120 a tonne, are an example of factors hampering BHP’s ability to build massive expansion projects like Olympic Dam.
If iron ore prices, which averaged about $US150 a tonne in 2011-12,
average $US120 a tonne this financial year, it would represent about a
$US3bn ($2.9bn) hit to BHP’s annual net profit.
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