BHP to Expand Copper Mine to Double Output

Potential at the copper Olympic Dam mine and elsewhere in BHP's portfolio supports analysts view that the stock is undervalued and has a narrow competitive advantage over peers

Mark Taylor 25 November, 2014 | 10:04AM
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BHP Billiton (BLT) has outlined its plans for the massive Olympic Dam copper/uranium mine in South Australia at a copper and coal focussed investor update this week.

Negative commodities-driven sentiment unwisely discounts BHP's resilience

It plans to debottleneck capacity by 50,000 tonnes, or 27%, to 235,000 tonnes of copper at a capital cost of $200 million, chiefly on the smelter and refinery. This would favourably reposition Olympic Dam to the first or second cost quartile post fiscal 2018, versus a current mid-third-quartile position. Second, the company is evaluating an underground expansion that would double ore hoisting capacity and increase copper production to more than 450,000 tonnes from fiscal 2024.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BHP Group PLC2,058.50 GBP0.00Rating

About Author

Mark Taylor  is an equity analyst at Morningstar.