BHP Billiton upbeat on Olympic Dam plan and potash #potash #uranium
BHP Billiton upbeat on Olympic Dam plan
by: SARAH-JANE TASKER
From: Business Spectator
November 20, 2014 2:33PM
BHP Billiton’s plan to expand its massive Olympic Dam mine by using a heap-leach process is showing “promise”, according to chief Andrew Mackenzie, giving hope to South Australia more than two years after the world’s largest miner abandoned a $30 billion expansion at the mine.
Mr Mackenzie, speaking to shareholders at BHP’s (BHP) Australian annual meeting in Adelaide this morning, said that if the heap leaching trials under way at Olympic Dam proved successful, adding they were showing “promise”, then the miner would use the technology and phased expansions of the underground mine to further increase Olympic Dam’s output.
South Australia had been banking on the original $30bn expansion plan to underpin an economic surge and any hint of success with the new low-cost option would be closely watched.
Mr Mackenzie said that throughout the process the state and federal governments had been supportive and created an environment that was “highly conducive” to business investment.
The company also used the meeting to again outline its view on climate change, which comes just after the issue was widely discussed on the sidelines of the G20 after US President Barack Obama gave a speech on climate change during his visit to Australia for the economic forum.
Australia had resisted putting climate change on the G20 agenda, arguing it was an economic forum and there were other forums to discuss climate change.
BHP chairman Jac Nasser said today that climate change was a global challenge posing a significant risk to the environment and therefore social and “economic” development.
Mr Nasser said the miner’s business strategy depended on sustainable global growth, adding that it
was clear this would require substantial reductions in greenhouse gas emissions.
He said that would, in turn, change the structure of energy markets around the world.
He also again outlined that the world’s largest miner supported a price on carbon.
“But a carbon price alone will not be sufficient to drive the pace and scale of the global response required,” he said.
The chairman of the world’s largest miner also outlined the benefits of its planned $17 billion demerger of its non-core assets.
He said the company had
good progress in recent weeks and that the de-merger was on track.
“We have received a number of the more significant regulatory approvals, including from Australia’s foreign investment review board and the Australian Taxation Office and we are progressing well on those that remain outstanding,” he said.
On the demerger, Mr Nasser said that the company could reduce costs and improve the productivity of its remaining assets more quickly.
“This means we should generate stronger growth in free cash flow and a superior return on investment,” he said.
BHP expects to release all shareholder documentation with full details of the de-merger in March, with a shareholder vote scheduled for May.
Mr Nasser also talked up BHP’s potential fifth major commodity, potash, as driving food production through its use as a fertiliser.
Despite the end of the mining boom and urgent calls from the government and the Reserve Bank for other sectors to step up, Mr Nasser highlighted how important the resources industry remained to the Australian economy.
“The industry’s export earnings increased by 12 per cent to $US195 billion, representing more than half of Australia’s export earnings,” he said.
“There are very few industries in Australia that have world scale and are globally competitive. The resources industry is one of them; an industry that is ready to lead Australia’s prosperity for decades to come.”
BHP’s shares were 56c lower at $32.11 at 11:19am (AEDT) in trading on the Australian Securities Exchange.
The stock has fallen about 18 per cent since August.