Antinuclear

As BHP reins in spending, Olympic Dam uranium mine the most likely project to drop

BHP’s investment plans and faltering share price have been a concern for investors, …… Analysts and government ministers have estimated the investment in expanding Olympic Dam could top $30 billion ….

BHP’s New Mine Projects Look Less Assured, WSJ,May 31, 2012, BHP Billiton’s more cautious approach to investment may mean approval for several $10 billion-plus “mega” projects won’t come this year, setting the stage for heightened friction with governments and increased calls for cash to be returned to shareholders if development spending is reined in.

Executives at the world’s biggest mining company by sales and market value are working on the latest annual five-year plan for BHP, but have already backed away from a bold $80 billion target laid out last year before economic growth in key commodities consumer China began to slow and metals prices faltered.

Key in BHP’s portfolio of growth projects are the extension of its
iron ore port facilities in western Australia, the expansion of its
Olympic Dam copper-uranium mine in southern Australia and a potash
development in Canada. The three projects will be considered by BHP’s
board at the end of the calendar year, a spokeswoman for the company
said this week.

Still, it seems increasingly likely approval for all three won’t come
during that time frame. …. “If the economics of a project look
marginal for whatever reason, whether it is cost escalation or a lack
of confidence in demand, then delaying a decision is the right thing
to do,” said Prasad Patkar, a portfolio manager at Platypus Asset
Management in Sydney. However, he added that if the scale of a project
is reduced or its timing delayed, it will only increase calls from
shareholders for increased dividends and share buybacks.

BHP’s investment plans and faltering share price have been a concern for investors, …… Analysts and government ministers have estimated the investment in expanding Olympic Dam could top $30 billion ….
http://blogs.wsj.com/dealjournalaustralia/2012/05/31/bhp%E2%80%99s-new-mine-projects-look-less-assured/

June 1, 2012 - Posted by Christina Macpherson | business, South Australia, uranium | South Australia