Gold price firms in holiday-thinned trade, spotlight on Fed and Trump policies
The yellow metal has gained 27% so far this year.
Zecco reports the state of South Australia has allowed BHP Billiton to put off a decision on whether it is going ahead with its Olympic Dam project until 8 December this year.
If the board of the world’s largest miner does not make a decision on the giant copper-gold-uranium-silver project in South Australia’s outback by then it would lose all approvals and royalties concessions.
Previously the London and Sydney-listed company said it would decide by mid-year but doubts were raised about the viability of the project when the BHP’s chairman confirmed earlier comments from BHP’s top execs about scaling back its most ambitious programs saying it will not spend the $80 billion previously set aside for expansion by 2015.
While most analysts expect BHP will continue to pour money into iron ore in Australia, the company’s other megaprojects – Olympic Dam, expansion of its US shale gas operations and Jansen potash project in Canada – may be put on the back burner.
Last week the CEO of the so-called Olympic Dam Taskforce, a state official, told a conference that the expansion was “a project with a 100 year mining life, so a glitch this year was unlikely to sway a company that thinks well ahead,” adding that it has “begun planning for the major village expansion – for 10,000 people — and begun building a new airstrip capable of handling 737 aircraft.”
The project is set to become the world’s biggest open pit and also includes construction of 270km of powerlines, a 400 km pipeline, a new desalination plant and a 105km railway.
The planned open pit mine would be adjacent to the current Olympic Dam underground operation. An idea of the olympian effort required to construct the mine and the size of the undertaking is clear from the fact that trucks will haul overburden 24/7 for five to six years just to reach the ore body.
The combined operations would mine 72 Mt ore per year and would produce 750,000 tonnes refined copper, 19,000 tonnes uranium oxide, 800,000 gold ounces and 2.9 Moz of silver per year.
It is not only BHP investors who are biting their nails over Whether Olympic Dam is going ahead or not.
MINING.com reported over the weekend that the big miners are playing game of chicken over delaying new supply to the market.
New research shows marginal producers of iron ore, zinc, thermal coal, ferrochrome, nickel and aluminium can’t turn a profit at today’s prices and a little help from the market leaders to prop up prices would be most welcome.
Read more about the mining industry’s new normal >>
