Defying the moderate outlook for commodities in the current year, BHP Billiton confirmed last week that it has forged a $3-million deal with Copper Range Ltd for the transfer of the latter's existing and pending explorations in South Australia's Olympic Dam.
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.
In a statement, BHP said that "by taking this initial step of securing the exploration rights, we are making a relatively low-cost investment in a potential future option that may not be exercised for many years."
"We believe there is potential for additional iron oxide copper gold discoveries in the Stuart Shelf region of Australia," the mining giant was reported by The Australian as saying.
The transaction, BHP said, covers four existing licences and five applications under Copper Range, which in early 2011 saw the exit of its key venture partner in the project, leaving the junior miner's prospect in Olympic Dam largely hanging in limbo.
Copper Range said that the deal with BHP, which will be finalised by the end of 2011, should give it the leeway to reconsolidate and focus on other projects.
Analysts noted that BHP has been ramping up its efforts to produce more gold, copper and uranium over the next 10 years and securing explorations rights in the area was part of the miner's Olympic Dam battle plan.
This year alone, BHP spent more than $20 million to purchase exploration licences from smaller firms, which highlighted the company's long-term operational blueprint in the region, according to The Advertiser.
Expansions were being pursued amidst the softening commodity prices in the world market, with BHP officials convinced that even as China's economy is poised to cool down in the near term, the country's hunger for Australian resources should sustain long-term profitability for copper, gold and uranium production.
The miner's Olympic Dam projects alone could cost the firm some $30 billion, with two projects, The Australian said, set to be approved by the end of the year.
Aside from the Olympic Dam output expansion, BHP said it plans to increase its Escondido copper production in Chile to 1.3 million tonnes each year by 2015, according to reports by Dow Jones.
BHP said that its partner in the project, Rio Tinto, has agreed to jointly spend $4.5 billion for the copper yield of Escondido to dramatically spike over the next three years.
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