nuclear-news

Huge copper/uranium mine plan might be abandoned, trend towards recycling metals adds to poor market prospects for BHP’s Olympic Dam

Olympic Dam is surely under review,” said UBS mining analyst Glyn Lawcock. “It’s not an issue of finding the cash,” he said, but rather ensuring a good return on the investment……

Further curbing the appetite for refined copper, BHP now sees recycled scrap meeting up to 50 percent of China’s overall demand in the coming year for the metal, up from 35 percent now.

there is a much bigger question mark over it [Olympic Dam new mine] now

BHP Olympic Dam delay would tighten copper supply Reuters, By James Regan SYDNEY | Fri Jul 6, 2012 “….. A 25 percent drop in benchmark international copper prices since early 2011 has eroded potential returns from the project, and the economic slowdown in top base metal consumer China has dampened the demand outlook.

BHP’s scheme to quadruple output from Olympic Dam – the fourth-largest known copper deposit and largest uranium source in the world – is one a growing number analysts believe likely to be shelved until markets stabilize…. London copper prices have fallen to around $7,650 a metric ton (1.1023 tons) from a peak over $10,000 in early 2011 as big copper buyers such as car and computer manufacturers slow consumption…

Olympic Dam is surely under review,” said UBS mining analyst Glyn Lawcock. “It’s not an issue of finding the cash,” he
said, but rather ensuring a good return on the investment……
The board is due to decide by the end of the year whether or not to
continue work to transform Olympic Dam from an underground mine to an
open pit operation capable of yielding 750,000 metric tons of copper
and 19,000 metric tons of uranium a year.

BHP’s decision will be complicated by mixed views on the supply and
demand balance for copper. This year, supplies are running around
180,000 metric tons behind demand, and that deficit could narrow to
around 7,000 metric tons in 2013 as new production comes on stream,
according to a Reuters poll in April.<MET/POLL>

As the global economy falters that deficit could become a glut.
Increased use of scrap copper could also mean oversupply.

Further curbing the appetite for refined copper, BHP now sees recycled scrap meeting up to 50 percent of China’s overall demand in the coming year for the metal, up from 35 percent now.

The Lisbon-based International Copper Study Group, which compiles data
from producers and consumers, expects global refined copper output to
exceed demand by 350,000 next year.

“That alone suggests Olympic Dam isn’t needed for at least another two
years,” said Wendt of MineLife .

“The slowdown occurring in China is not something BHP will have seen
coming when it started making plans to expand,” said David Lennox, a
mining analyst for Fat Prophets in Sydney.
Late last year, BHP’s board earmarked $1.2 billion for
“pre-commitment” funding after the government of South Australia state
ratified an indenture agreement with BHP that mandated a final board
decision on the mine by the end of 2012.

“Given world economic circumstances, I think there is a much bigger
question mark over it now than there was perhaps when the indenture
was ratified by the parliament at the end of last year,” said Isobel
Redmond, a state parliamentarian pushing to see Olympic Dam developed
to help stimulate jobs……
For its part, BHP insists uranium from Olympic Dam is little more than a welcome by-product providing an additional income stream and that copper will always dictate the project’s course.

July 10, 2012 - Posted by Christina Macpherson | AUSTRALIA, business and costs