Australia approves BHP's massive Olympic Dam expansion

10th October 2011, Comments 0 comments

Australia on Monday gave environmental approval for mining behemoth BHP Billiton to expand its Olympic Dam project and create what officials said would be the world's largest open pit mine.

Federal Environment Minister Tony Burke gave the green light to BHP's proposals, but set more than 100 conditions on the uranium and copper project which is hoped will boost exports and create thousands of jobs.

"While I have considered the economic and jobs benefits of this project, my focus has been on protecting matters of national environmental significance," Burke said.

"The strict conditions I've imposed will help ensure protection of the natural environment, including native species, groundwater and vegetation, for the long-term."

BHP Billiton has proposed creating a massive open mine pit, which will operate alongside its existing underground mine, to deliver more copper and uranium to meet global demand.

It will also expand its processing operations at the site if it commits to the expansion at a board meeting early next year.

Under the government's conditions, the Anglo-Australian miner will be required to establish an offset area of about 140,000 hectares (346,000 acres) -- eight times the amount of land forecast to be cleared for the project.

"The conditions apply to all parts of the project, including the proposed desalination plant in the Upper Spencer Gulf, and will ensure that the Gulf and its marine life -- including the giant cuttlefish -- are protected," Burke said.

When the mine is closed, BHP Billiton must cover the tailings, or run-off waste, storage facility to ensure the long-term protection of the environment, Burke added.

"The company will be held accountable if it doesn't comply with the strict approval conditions," he said.

BHP Billiton has forecast that the expansion of the site, about 570 kilometres (350 miles) north of Adelaide, will create more than 13,000 jobs and contribute Aus$45 billion ($45 billion) to the economy over three decades.

The South Australian government, which also approved the expansion Monday, said the project was a "game changer" for the state economy.

"Today marks this state being one step closer to being the home to the world's largest open pit mine," state Mineral Resources Development Minister Tom Koutsantonis said.

"That in itself is an economic game changer for this state."

BHP Billiton must now sign an agreement, which covers royalties, with the South Australian government for the deal to proceed. Legislation approving the indenture is expected to be passed by the end of the year.

Under the South Australian development approval, which is subject to 150 environmental conditions, the company can build a new mine which will produce 750,000 tonnes of copper and about 19,000 tonnes of uranium oxide each year.

The company also has approval to construct a desalination plant on the Spencer Gulf to supply water to the mine, a gas-fired power station, railway lines, and an airport at Olympic Dam.

The mine's waste rock facility will cover close to 7,000 hectares and reach a height of 150 metres (490 feet).

BHP refused to comment on the cost, but the company has said that it could spend up to US$80 billion over the next five years on projects around the world.

In August BHP Billiton announced its full-year net profit almost doubled to a mammoth US$23.6 billion, the biggest-ever profit result for an Australian, citing robust demand from China and India.

© 2011 AFP

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