Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
BHP expects a plant at its Olympic Dam mine to restart this month following repairs and the company has found a way to deliver returns from the asset as part of a focus on maxmising productivity, its head of Australian operations said on Tuesday.
“The expectation remains that we’ll have that back up and running this month,” Mike Henry, president of operations, minerals Australia, said in an interview on the sidelines of LME Week, an industry gathering in London.
“We have identified a very credible route to growing the asset,” Henry said, adding the company was on track with a plan to seek board approval for “bite-sized chunks of capital (expenditure) with healthy returns”.
Mike Henry, president of operations, minerals Australia, said BHP has identified a ‘very credible’ route to growing the asset.
Henry said Olympic Dam, which contains uranium oxide, copper, gold and silver, was “a wonderful ore body”, but in the latest in a series of setbacks, BHP in August announced it had shut an acid plant following a boiler tube failure, disrupting copper processing. Underground mining at the site continued as normal.
The company’s CEO said at the time Olympic Dam was the only part of the business not delivering “an acceptable return on capital”.
In Brazil meanwhile, it is still too soon to say when BHP’s Samarco iron ore operations, a joint venture with Vale , will resume output following a dam burst in late 2015. Brazil says this was its worst environmental disaster.
“We’re not on the cusp of a restart let’s put it that way,” Henry said and listed everything that needed to happen first, including winning community support, securing permits, ironing out technical details, proving the asset is “financially attractive” and restructuring its debt.
BHP is also still resolving legal issues in Brazil. It has signed a deal with Brazilian authorities that resolves a 20 billion reais ($5.30 billion) lawsuit, but separately it has two years to reach a settlement over a 155 billion reais lawsuit.
The company also remains under pressure from activist investor Elliott Advisors, which has called for BHP to collapse its dual British-Australian structure.
Unilever executives last week scrapped plans to move the company headquarters from London to the Netherlands in the face of a shareholder revolt.
BHP’s Henry said BHP had never ruled out collapsing its dual structure and would continue to look at the possibility, but it had yet to be convinced it could be cost effective.
“One thing we would take away from the Unilever decision is making sure we’re soliciting views from the full group of shareholders,” Henry said.
Elliott Advisors had no comment on Tuesday. (Reporting by Barbara Lewis. Editing by Jane Merriman)
