Antinuclear

Investors not happy with giant uranium mine project, Olympic Dam’s future is questionable

 BHP’s chairman Jacques Nasser said the company would not proceed with all of its previously planned $80 billion worth of expansion plans.

Platypus Asset Management portfolio manager Prasad Patkar says Olympic Dam is not the company’s top expansion priority…..  When asked if Olympic Dam project’s future was more questionable, Mr Patkar summed it up in one word: “yeah”.

Olympic Dam expansion may fall at last hurdle ABC News, By business reporter Michael Janda May 31, 2012  Analysts estimate the cost of BHP Billiton’s proposed Olympic Dam mine expansion at $30 billion, making it one of the biggest corporate investment commitments in history.

But the latest global economic wobbles appear to have given the world’s largest miner a severe case of commitment-phobia.

Two weeks ago, BHP’s chairman Jacques Nasser said the company would not proceed with all of its previously planned $80 billion worth of expansion plans.

Now its chief executive Marius Kloppers has told a Chinese news service that the company will not be making any major investment decisions in the next six months.

“You should not expect in the next six months any new major approval of projects,” he told Caixin Media.

“The economics of some of these projects has changed. I think for the next two years, 18 months perhaps, we will just wait and see how things develop.”

Minelife senior resource analyst Gavin Wendt says Olympic Dam is one of the company’s projects most in jeopardy.

“I think if BHP was really dead keen on getting the project into production, I think the whole process could’ve been expedited,” he observed….. South Australia’s Premier Jay Weatherill is adamant the mid-December deadline will not be extended.

“We negotiated the 12-month timeline advisedly so that we knew where we would stand, and the approvals all come up for renegotiation  should that timeline be breached,” he told reporters.

BHP has given itself a big financial incentive to go ahead with Olympic Dam – it has already started spending $1.2 billion of ‘pre-commitment capital’ on trucks, accommodation and infrastructure development.

However, Platypus Asset Management portfolio manager Prasad Patkar says Olympic Dam is not the company’s top expansion priority…..

When asked if Olympic Dam project’s future was more questionable, Mr Patkar summed it up in one word: “yeah”.

Angus Taylor is the author of a study by Port Jackson Partners for the Minerals Council of Australia that finds Australia’s mining sector is becoming less competitive internationally….. the Olympic Dam project is also subject to these rising costs, which is one of the reasons for BHP’s hesitation in approving it. http://www.abc.net.au/news/2012-05-31/doubts-thrown-on-olympic-dam-mine-expansion/4044854

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