The mine had produced around 162,000 tonnes of copper for the nine months to March 31, and was on track to exceed 200,000t.
Speaking at a South Australian Chamber of Mines and Energy lunch in Adelaide today, Olympic Dam asset president Jacqui McGill hinted that the mine achieved the target, the best result since 2005 and the highest under BHP ownership.
“I truly believe this year’s production sets us up for bigger things to come on a sustainable basis,” she said.
McGill said the team had also gotten “runs on the board” in terms of its goal of reducing C1 costs to $US1 a pound.
She added that this would be helped by an increasing grade profile.
“That’s because we are starting to move into the Southern Mine Area, which represents 70% of the orebody that we haven’t even touched in our first 25 years of operation,” she said.
“This allows us to reverse the trend of declining grade, and indeed allows us to gradually increase the average grade of the ore we mine, back above 2% copper.”
McGill likened the Olympic Dam orebody to a guitar. If the Northern Area of the resource was the neck, the Southern Mine Area was the “body of the guitar”.
“This area was the location of the proposed open pit, which formed part of the major expansion project deferred in August 2012,” she said.
“This high-grade ore will release latent capacity within our existing operations and build the foundation for longer-term value extraction.”
Without a “big bang” expansion of the mine, production at Olympic Dam should increase to around 230,000t copper from FY21 and further optimisations and capital could grow annual output to 280,000t.
BHP is already looking at options beyond 280,000tpa.
“Continuing expansion underground, and successful on-site application of heap leach technology could provide an opportunity for further growth,” McGill said.
“This would see heap leach working in parallel with our current concentrator and uranium leach plant, feeding into an expanded smelting and refining facility.
“This could allow us to produce up to 450,000 tonnes of copper per annum, while continuing to use the current stope mining method with a significantly smaller footprint and capital cost than the prior open-cut design.”
Heap leach testwork, underway since 2010, has moved into the next phase, with smelter pilot plant work set to kick off at Outotec in Finland in September.
BHP, as manager of the massive Escondida mine, approved a $200 million concentrator expansion for the Chilean operation this week.
BHP shares were down A2c to $19.06.
