Even if BHP Billiton (ASX: BHP) has not totally abandoned its plans to expand the Olympic Dam uranium, copper and gold project in the long term, the giant miner has no guarantees and timeline yet for the project, South Australian Premier Jay Weatherill said on Monday.
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.
Mr Weatherill met with BHP Chief Executive Marius Kloppers and told the latter than BHP would need to work harder to regain the support of SA residents following the miner's decision to shelf aside the $30-billion expansion plan amid low commodity prices and economic uncertainty.
The premier disclosed that Mr Kloppers provided some details on new technologies for the project expansion such as the use of a steeper pit to reach the iron body and new leaching technology to replace traditional smelting.
However, it is unclear if the new methods would need new environmental approvals if BHP would expand operations in Olympic Dam in the future or if there are amendments to the indenture legislation approved for the initial expansion plans
The sunset clause in the indenture bill is scheduled to lapse in December but BHP has not yet sought for an extension, Mr Weatherill said.
"This is not a project that we had approved, it's a project that we are working towards approving. I can't give you an exact timeframe of when this project will be approved," Perth Now quoted Mr Klopper's reply to the premier.
Mr Kloppers explained that BHP is hoping that the market conditions and cash conditions will come up and synergise to enable the company to reach a decision soon on the venture, considered the world's largest open cut mine had it pushed through as planned.
He admitted that is very difficult to forecast if all things related to the project expansion would come together but BHP is working hard on various issues to maximise the value of the ore body in the state.
He said that while the business environment in the resource industry is not as benign as 12 or 18 months ago, its strategy of having a large, low-cost and diversified portfolio is valued by shareholders and rewarded by the market.
Economists estimated the cost to the SA economy of BHP's decision to shelf aside its expansion plan at more than $1 billion over the next five years due to lost job opportunities, writedown in land values and cancellation of the infrastructure projects linked to the expansion plan such as a new airport, desalination plant, power stations and road and rail improvements.
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