Unless some evidence of construction work has been made by year end on the programmed $33 billion expansion of the Olympic Dam copper and uranium mine project, it is likely that Australia might revoke the right to proceed it had given to mine owner and developer BHP Billiton Ltd.
Shortly after a month that it announced it is cancelling the $30-billion expansion of the Olympic Dam copper and uranium mine mega project, global mining giant BHP Billiton has asked the state government of South Australia to extend the deadline coverage of the indenture agreement the two parties signed in October 2011.
"I will not be granting an extension to BHP," Tom Koutsantonis, South Australia's minister of mining, said in Bloomberg News, noting an extension could only be considered if BHP Billiton Ltd. had somehow started doing physical work and mining on the site.
"I expect there to be evidence that they've begun mining."
In October 2011, the Federal and South Australian governments gave BHP Billiton Ltd. the environmental approval to proceed with its plan to expand and develop the Olympic Dam mine which is seen to yield copper and uranium oxide production by more than quadruple to about 750,000 tonnes and about 19,000 tonnes, respectively, every year.
But just over a week ago, BHP Billiton Ltd.'s very own chairman, Jacques Nasser, declared the company will be safekeeping the $80 billion it had earlier planned to invest on new mining projects by 2015, owing to the dismal prices of commodities prevailing in the world markets today.
The deferral could likely affect the Olympic Dam copper and uranium mine project, said to be the world's fourth-largest copper and gold deposit and the largest known uranium deposit. Located north of Adelaide, it is expected to contribute to Australia's cash coffers an estimated $45 billion annually over the next 40 years once completed.
Based on the October 2011 approval, the board of directors of BHP Billiton Ltd. was expected to make a final decision early on 2012 if it will push through with its expansion plans of the Olympic Dam copper and uranium mine project. But then, majority of the concerns focused on complying with the 250 environmental conditions contained in the environmental approval given by federal and state governments.
Seven months after, including several erratic movements in the world prices of commodities, BHP Billiton Ltd. has turned far less aggressive on its expansion plans.
In the same Bloomberg report, BHP Billiton Ltd. admitted its final decision whether to push through or not on the Olympic Dam copper and uranium mine project in Australia has been push penned "by the board until the end of 2012."
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