BHP Billiton releases details of its Olympic Dam mine expansion
Christopher Russell and Daniel Wills
From: The Advertiser May 14, 2011 12:00AM
BHP Billiton says opponents of the proposed Olympic Dam expansion should face rigorous scientific scrutiny.
Outlining key changes to BHP's plans in response to public and government concerns, the company executive in charge of the project, Dean Dalla Valle, said the mining giant was confident the science stacked up in favour of the expansion, which would be worth up to $48.4 billion over its first 30 years to the South Australian economy.
The most significant change to the plans is re-engineering the desalination plant proposed at Point Lowly, near Whyalla.
"We've done extensive research into our desalination plant," Mr Dalla Valle said.
"I think it would be fair to ask of purported scientists criticising the plant whether they've carried out the same amount of work, and to the same level of rigour and discipline."
The 100Gl/year desalination plant was the most commonly raised issue among 4189 public submissions to BHP's plans outlined in its 2009 Draft Environmental Impact Statement.
Yesterday BHP published its Supplementary Environmental Impact Statement on the project, which aims to address the concerns of the public as well as the federal, state and NT governments.
BHP wants to expand the copper/uranium/gold mine in stages over 30 to 40 years, creating a peak of 15,700 jobs during construction.
Once fully operational, the Olympic Dam permanent workforce would increase from 3000 to 7000 with a further 1000 contractor positions and 15,000 indirect jobs created.
Changes between the EIS documents include:
REDESIGN of the desalination plant.
CHANGING access routes to a barge-landing facility near Port Augusta.
EXPANDING tailings storage.
BUILDING a road from the proposed village Hiltaba directly to the Olympic Dam site.
Some concerns raised in the submissions were deemed beyond the scope of BHP to answer.
These included one submission warning the mine's open pit would would be visible from space and attract aliens.
The desalination plant attracted widespread criticism over fears it would harm the breeding grounds of the giant Australian cuttlefish.
To alleviate concerns, BHP now plans to tunnel an outflow pipe rather than cut a trench into the seabed - thus leaving the cuttlefish zone undisturbed. The discharge would be an extra 200m offshore, aimed at the swiftest current movements about 800m offshore.
BHP's studies show the currents - the prime method of mixing the desal discharge with seawater - is stronger off Point Lowly than at Elliston on the West Coast and often cited as a better option.
The Supplementary EIS will now be considered by the state, Commonwealth and NT governments. State Parliament will need to amend the indenture Act on Olympic Dam.
Premier Mike Rann said negotiations would begin in earnest to maximise economic, social and environmental outcomes of the project.
He stressed the State Government was not a "rubber stamp".
He refused to say whether BHP would pay the standard rate for royalties nor would he forecast the project's State Budget impact.
"Their job is to get the best job for the company and its shareholders. My job is to get the best deal for the state," he said.
"It's the biggest economic opportunity this state has ever had."
It needed to be viewed as a long-term project which was profitable for BHP and delivered maximum benefits for SA.
"That's benefits in terms of jobs, contracts and also benefits in terms of onshore processing," he said.
Opposition Leader Isobel Redmond said her party was very aware of the importance of the project.
"Whilst reviewing the document the Liberals will need to ensure that the environment is protected but have every confidence that BHP has the same aim," Ms Redmond said.
Mr Dalla Valle dismissed concerns BHP would have the upper hand in negotiations because it had many projects on its books while SA had no options on the scale of Olympic Dam.
"We don't think so. We do work very closely with the SA Government and for this project to be successful, it requires bipartisan support at the state level," he said.
He pledged to seek "a good, long-term, sustainable way forward for the project".
Analysts estimate expanding the mine will cost at least $20 billion but Mr Dalla Valle said BHP could not provide costs until the board approved the project.
He hoped the board decision would be early in 2012, but it was not possible to be precise.
"We need to see all the conditions and approvals that will be imposed on us, we need to understand them," he said.
"If we receive the governments' response in the second half of this year, we'll have a quarter to a half year to come up with our optimised proposal to present that to the BHP Billiton board for a decision early next year."
1975 - Olympic Dam mineral deposit discovered by WMC Resources.
1988 - Mine officially opened, production commences.
2005 - BHP Billiton acquires Olympic Dam.
2006 - Draft proposal for expansion.
2009 - Draft Environmental Impact Statement released.
May 2011 - Supplementary Environmental Impact Statement released by BHP Billiton's Uranium Group president Dean Dalla Valle.
By December 2011 - Commonwealth, South Australian and Northern Territory governments expected to deliver approvals with conditions. Negotiations on Indenture Act governing management of area - and royalty rates - continue with State Government.
By March 2012 - BHP Billiton board to vote on whether to proceed with expansion.
2012 - If approved, expansion of Roxby Downs, building of Hiltaba Village and removal of overburden begins.
2015 - Airport large enough to land jumbo jets developed.
2017 - Ore body exposed, mining begins.
SIZE, COST AND VALUE
THE expansion project will turn the current underground operation into one of the world's largest open-cut mines - a hole that will take more than four years to uncover and processing facilities that will take 11 years to build.
OLYMPIC Dam hosts the world's largest uranium and the world's fourth-largest copper deposit. It is Australia's biggest known gold deposit.
BHP BILLITON will not discuss the cost of the expansion until it is approved by the board. Analysts estimate the total cost could top $20 billion.
THE project will contribute $45.7 billion to the state over the first 30 years including $3.4 billion in state government taxes. About $2.6 billion will be paid in federal taxes - not including carbon tax.
THE project will give rise to a new rail line, new electricity and gas pipelines, a new village called Hiltaba, a new barge docking facility off Port Augusta, an expansion of Roxby Downs village, a new airport capable of handling jumbo jets and renewed activity at Outer Harbor and Darwin.
THE project will create 13,100 South Australian jobs (full-time equivalent), peaking at 15,700 between years seven and 11.
ROAD transport companies will be the big winners with $2.1 billion of net economic benefits created over the first 30 years of the project. Rail transport ($570 million) and electricity suppliers ($730 million) will also win while the company estimates the Northern Territory's construction industry will gain an additional $68 million in economic benefits.
A COMPLETED Olympic Dam will use 5270MW of electricity at its peak - or more than 60 per cent of the state's current baseload demand.
A NEW desalination plant would be required, requiring an additional 35MW to be supplied by renewable energy through the National Electricity Market.
BHP BILLITON will build a gas cogeneration plant to capture and transform waste heat, generating 250MW, and is investigating a 150MW solar thermal array.
FURTHER power requirements would be supplied by a 270km transmission line from Port Augusta or a 600MW combined gas cycle turbine power station with three options to link to Moomba for gas supplies.
RENEWABLE options - including biodiesel, solar power and geothermal power - will be investigated over the next 30 years as they become available for baseload power.
AT ITS peak, Olympic Dam will produce 4.7 million tonnes of greenhouse gases each year - about 9.8 per cent of the state's predicted emissions, or 0.009 per cent of predicted global emissions.
POINT Lowly in the Upper Spencer Gulf remains the company's preferred option for a 200ML/day desalination plant.
THE company has acknowledged concerns about the marine environment, including the Giant Australian Cuttlefish.
THE discharge pipeline will be tunnelled, rather than using a trench, and released 800m from shore to alleviate concerns about disturbing the ocean floor and choking oxygen levels with pooled brine discharges.
THE company has committed to stopping the flow of discharge water if pooling occurs.