Business

Kloppers' visit confirms Olympic Dam a pipe dream

Bleak house or happy house? It depends on which newspaper you read, following the visit to Adelaide yesterday by BHP Billiton CEO Marius Kloppers.

Kloppers was here at the invitation of Premier Jay Weatherill, who was keen to pass on the disappointment of South Australians arising from BHP's decision to make no decision on the proposed Olympic Dam expansion. Or as Kloppers himself put it: "Until a decision is made, it is not made."

The BHP boss fronted the media after his meeting with the state government and his assessment of the now "unviable" project drew differing reportage.

"Digging in: BHP boss won’t give up on Dam riches," The Advertiser cheered from its front page and again inside where it labelled the South African mining executive "Super Marius". "Kloppers' bleak Olympic hopes," said The Australian rolling off the comments that there was no timeframe for the project and no guarantee it would ever go ahead.

ABC TV took a neutral position, reporting that BHP Billiton says it remains committed to expanding the mine, but will look to technology for a cheaper extraction method. Channels Nine and Seven were very clear on the news value of Kloppers' visit -- they led their local bulletins with the long-wait experienced by Crows fans wanting tickets to Saturday’s AFL qualifying final.

So, just what is the status of the Olympic Dam expansion plan?

On May 31 this year the state Treasurer Jack Snelling talked up the prospect that "South Australia will be a very different place in a few years. The expanded Olympic Dam mine -- the largest open-pit mine in the world -- will be operating, along with dozens of others, exporting copper, gold and uranium to a region hungry for our resources."

Yesterday Kloppers made it clear the project his company proposed in the 15,000-page Environmental Impact Assessment and that government legislated for in the Amended Indenture Agreement is officially dead.

Referring to rising costs of labour, materials and energy and the mix of a high Australian dollar and technical difficulties he said this: "There have been general industry-wide cost increases, which, when coupled with high energy costs which you use a lot -- i.e. diesel -- which has made a concept we thought would work, unviable."

Weatherill had clearly got the message, conceding yesterday that the current model planned for the expansion "does not work".

"It is their intention to advance the project, it remains a valuable ore body and it is their intention to proceed with the expansion," he said. "But they are not able to advance a time when the technology will be proven, nor are they able to give us certainty about whether the technology will be capable of being proven, and therefore they will not be in a position to give us certainty about when the mine proceeds."

And that's where we are in September 2012 -- in the same place we were in the 1970s when geologists first got excited about the dirt near a waterhole called Olympic Dam on Roxby Downs Station.

Turning dreams into reality is a tough business -- explaining how and why you convinced an entire state to believe in the dream requires a better explanation than we've had so far.

*This article was first published at InDaily


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