Olympic Dam fires up after production slump

Copper production at BHP’s Olympic Dam mine fell by a third in the 2021-22 financial year despite bouncing back strongly in the June quarter following a major smelter upgrade.

Jul 19, 2022, updated Jul 19, 2022
Olympic Dam at dusk.

Olympic Dam at dusk.

The mining giant reported this morning that it produced 55,700 tonnes of copper cathode in the three months to the end of June, the third highest quarter of copper production at Olympic Dam since BHP bought the operation in 2005.

The result was up 43 per cent from the March quarter copper production total of 39,000 tonnes.

However, low production levels in the September and December quarters led to just 138,400 tonnes of copper produced at Olympic Dam in the financial year, down 33 per cent on the FY21 figure.

The 205,000 tonnes of copper produced there in FY21 was BHP’s highest annual copper production since acquiring the mine.

Gold production at Olympic Dam for the year was down 18 per cent from the record 145,998 ounces produced in FY21.

Uranium production for the year was also down 27 per cent to 2375 tonnes and silver production down 8 per cent to 743,000 ounces.

BHP completed a $500 million revamp of its Olympic Dam smelter in January after one of the lowest quarters of production since it took over South Australia’s largest mine, which is located near the town of Roxby Downs about 250km north of Port Augusta.

Australia’s largest listed company produced just 14,000 tonnes of copper at Olympic Dam in the three months to December 31 as a result of the major smelter maintenance campaign, which began in September.

This followed a 43 per cent decline in production to 30,000 tonnes in the September quarter as it ramped down ahead of the maintenance campaign.

The $500 million SMC21 project created 1500 jobs over a six-month period in addition to Olympic Dam’s regular South Australian workforce of approximately 8000 people.

It was scheduled to begin in August last year but was delayed by a month due to COVID-19 border restrictions.

Although the upgrade was completed in January, the ramp-up to full production was not achieved until April.

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In its statement to the ASX today, BHP said copper production for the 2023 financial year at Olympic Dam was expected to increase to between 195 and 215 kt.

At a group level, iron ore continued to lead the way over the year with production of more than 253 million tonnes, on par with the previous year while copper, coal and nickel production were all slightly down.

However, all of the major commodities achieved production boosts in the June quarter.

BHP Chief Executive Mike Henry said the company produced a strong fourth quarter to cap off “a year of significant progress”.

“We delivered record full-year sales volumes at our iron ore business in Western Australia as a result of reliable operational performance and the South Flank project which continued to ramp up,” he said in the ASX statement.

“In copper, Escondida in Chile had record material mined and near-record concentrator throughput, while Olympic Dam in South Australia performed strongly in the fourth quarter after planned smelter maintenance.”

At Oak Dam, about 65km south of Olympic Dame, BHP is continuing next stage resource definition drilling with six drill rigs.

BHP is Australia’s largest company and has a market capitalisation of about $187 billion.

Its shares were down eight cents to $36.88 at 1pm following this morning’s announcement.

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