Australian news, and some related international items

Poor market outlook for copper/uranium will make BHP delay Olympic Dam plans

BHP May Reduce Copper Supply Reduced Demand in China Hurts Production, Wealth Daily,  By Swagato Chakravorty , July 9th, 2012 After a 25 percent decline in international copper prices since 2011, BHP Billiton (NYSE: BHP) may need to reduce the global supply of  copper from late 2013 onward should the $30 billion Olympic Dam mine
project in Australia be delayed.
The sustained drop in copper prices has affected the potential for returns on the project, and China’s cooling economy has added on to demand woes. BHP intended to expand the mine in order to increase output fourfold from what is the world’s fourth-largest known copper deposit and biggest source of uranium.
40 percent of the world’s copper demand comes from China, which also cut its interest rates last Thursday for the second time as it increasingly focuses on shoring up its economy.
BHP is working on turning the Olympic Dam, which is currently a mine, into an open pit operation.
The board will make a decision by year-end on whether or not to continue the process, which would produce 750,000 metric tons of copper and 19,000 metric tons of uranium a year.
Right now the biggest problem is figuring out whether the current levels of copper will mean an oversupply as demand slows down everywhere…. for now, the analysts advise against the sort of mining expansion BHP is planning.
Reuters reports: “Now is not exactly the right time to be thinking of bringing more copper into the market and BHP knows this,” said Gavin Wendt, a mining analyst with MineLife in Sydney.

July 10, 2012 - Posted by | business, South Australia |

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