In addition to raising costs for miners and delaying certain projects, the focus on the amount of water used by the extraction industry in the region will boost social pressure and anti-mining sentiment, experts say.
Analysts expect BHP to argue that a demerged petroleum business would need to fund offshore growth projects by raising debt. It may also contend that a stand-alone division won’t have the same ability to defer production until oil prices improve.
Company says the associated risks of spinning off about $22 billion of its US oil assets and listing them in New York would significantly outweigh any potential benefits.
While the company had other projects in the country, the Bayan Khundii gold project went from greenfield prospect to being its main asset in roughly nine months.
Deal will also see the two firms looking at jointly developing the nearby Pascua-Lama gold, silver and copper project and evaluating additional investment opportunities in the area.
Tungsten, tin, tantalum and gold are now also being illegally extracted and traded at sites under the control of armed groups in countries including Myanmar and Colombia.