By Melanie Stott, 6th July 2012
They’re a funny lot, these big mining companies. Investing millions – well, billions – into projects all around Australia, but still threatening to pull up stumps and back out at any moment if there’s a hint of anything not going their way.
Which leads us to the Olympic Dam project in South Australia. It’s been big forever, but BHP Billiton are still deciding whether or not to go ahead and make it huge – about $30 billion dollars’ worth of huge – by going ahead with a long-planned expansion of its copper, gold and uranium operations.
The official line from BHP Billiton is that the decision will be made by the end of the year. It’s up to the board; depending on other options and other projects, commodity prices, China and so on.
Look a little closer though and, for all intents and purposes, the biggest mining project ever to be undertaken in South Australia is already underway.
Brand new mining trucks are being loaded off ships by the dozen and assembled in Whyalla, which is gearing itself up for a future as a fly-in, fly-out residential haven. Contracts have been awarded to SA firm Cavpower to provide all the specialised machinery, and jobs are being advertised left, right and centre as Cavpower boosts its workforce from 185 to 750.
So, is the full Olympic Dam expansion a sure thing?
The signs are good, according to the SA Minister for Mineral Resources, Tom Koutsantonis.
“The expansion of Olympic Dam is now progressing through BHP Billiton's own internal approvals processes. To date the Government has not received any request for an extension beyond the 15 December deadline, and we are proceeding in the expectation that the Board will meet and approve this project before the end of this year,” says the Minister.
The South Australian government has done everything in its power to keep BHP Billiton happy.
“We’ve completed key approvals with due diligence and rigour. BHP Billiton has committed to the required rollout of the $1.2 billion in pre-commitment spending, including $525 million to be spent in South Australia as part of the first phase of development,” says Mr Koutsantonis.
All is progressing well… but there are no guarantees – yet – leaving parts of regional South Australia potentially sitting on the edge of a boom. Like Whyalla.
You can still buy a decent three-bedroom home there for less than $200K. That’s what they used to sell for in Moranbah, before its boom, which pushed a pretty basic shack into the sales and rentals stratosphere. Newer, nicer homes in Whyalla appear to ask around the $350K-$400K mark.
Whyalla has the enviable benefit of being a lot closer to the sea than many far-flung mining hotspots, and not too far from the capital, Adelaide. It’s the old ‘location’ rule – tenants (and employees) tend to prefer any coastal property over one situated in a dustbowl.
Still, many investors will wait for the official word from BHP Billiton before taking a plunge.
There’s also the outcome of the next federal election to consider. Opposition Leader Tony Abbott has promised to make life easier for BHP Billiton in Australia, while Prime Minister Julia Gillard will no doubt continue to impose mining taxes on super-profits if re-elected.
Perhaps it will just be the Tories speculating in Whyalla before the election?!
Either way, the big trucks will be ready and waiting for Olympic Dam to kick into high gear. All they need to do now is find enough drivers.
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