Tag Archives: Oak Dam

BHP takes next step in smelter, refinery expansion at Copper South Australia

Base metals, Mine operation news, Sustainable mining, , , , , , ,

The South Australian Government has announced the commencement of an application and assessment process for BHP’s planned smelter and refinery expansion at Olympic Dam via a notification in the South Australian Government Gazette.

The notification is a step forward for BHP’s copper growth plans in South Australia and follows an update in the company’s financial year 2024 full-year results last week, which outlined a phased strategy to increase production in South Australia to 500,000 t/y of refined copper cathode by the early 2030s and then potentially up to 650,000 t/y by the mid-2030s – up from circa-322,000 t last financial year.

BHP Asset President Copper South Australia, Anna Wiley, said: “Today’s announcement is an important step for BHP and the South Australian Government as we work together towards our shared ambition to significantly increase copper production in this state.”

“We are already growing BHP’s copper production in South Australia with projects and studies underway at all of our operating sites, and we’re moving at pace to potentially double our current production by the middle of the next decade.”

BHP’s copper province in South Australia comprises the Olympic Dam, Prominent Hill and Carrapateena underground mines, which provide volumes of copper concentrate to a centralised smelter and refinery complex at Olympic Dam that produces refined copper cathode. The company is also progressing the Oak Dam exploration prospect.

BHP, last week, announced an inferred resource at Oak Dam of 1,340 Mt at 0.66% Cu and 0.33 g/t Au, within which is a mineralisation area that contains 220 Mt at 1.96% Cu and 0.68 g/t Au (at a 1% copper cutoff grade).

A final investment decision on phase one of the smelter and refinery expansion is currently scheduled in the first half of financial year 2027.

BHP eyes South Australian copper basin consolidation with latest OZ Minerals offer

Base metals, Energy minerals, Mineral project development, Mining mergers and acquisitions, Precious metals, , , , , , , , , , , ,

BHP has submitted a revised non-binding indicative proposal to the Board of OZ Minerals Limited (OZL) that, subject to a successful four-week due dilligence period, could see the major miner acquire the mid-tier base metal-focused miner.

The offer to acquire 100% of OZ Minerals by way of a scheme of arrangement for a cash price of A$28.25/share ($18.9/share) is a 13% increase on the offer BHP previously put forwad and was rejected by the OZ Minerals Board. It, according to BHP, represents the best and final price the mining major is willing to offer under, in the absence of a competing proposal.

The OZ Minerals Board has confirmed to BHP that it intends to unanimously recommend the revised proposal to OZ Minerals shareholders as being in their best interests in the absence of a superior proposal, subject to the parties entering into a binding scheme implementation agreement (SIA) following completion of BHP’s confirmatory due diligence and an independent expert concluding that the revised proposal is in the best interests of OZ Minerals shareholders, it said.

The proposed transaction, valuing OZ Minerals at an enterprise value of A$9.6 billion, is expected to deliver significant value creation for both BHP and OZ Minerals shareholders, BHP says, explaining that OZ Minerals shareholders would receive an offer price significantly above trading levels and average broker price targets, prior to BHP’s initial proposal on August 5, 2022. At the same time, BHP shareholders would gain increased exposure to future-facing commodities, adding copper and nickel resources that are essential to support the global megatrends of decarbonisation and electrification.

The deal would also create a South Australian copper basin, which, according to BHP, could unlock potential operational synergies due to the proximity of OZ Minerals’ Carrapateena and Prominent Hill operations with BHP’s existing Olympic Dam asset (pictured) and Oak Dam development resource.

The West Musgrave project, meanwhile, will add a large greenfield nickel option to BHP’s Nickel West premier nickel sulphide resource position in Western Australia.

BHP has now entered into a Confidentiality and Exclusivity Deed with OZ Minerals in relation to the revised proposal. This has seen OZ Minerals grant BHP four weeks to undertake exclusive confirmatory due diligence and negotiate a binding SIA reflecting the key terms of the revised proposal. The four-week period is expected to commence on or around November 21, 2022.

BHP CEO, Mike Henry, said: “BHP’s proposal represents a highly compelling offer for OZ Minerals shareholders, providing certainty at a time of macroeconomic uncertainty and market volatility, and increasing risks for the industry.

“The combination of BHP and OZ Minerals’ assets, skills and technical expertise provides a unique opportunity not available under separate ownership, with complementary resources including the Oak Dam exploration prospect and existing facilities within close proximity, backed by BHP’s strong balance sheet, capital discipline and commitment to sustainable development.”

OZ Minerals Managing Director and Chief Executive Officer, Andrew Cole, said: “BHP’s revised proposal is a clear reflection of OZ Minerals’ unique set of highly strategic, quality assets in quality jurisdictions and an enviable multi-generational growth pipeline of copper and nickel
assets in strong demand due to global electrification. We look forward to working with BHP in a collaborative way to progress the revised proposal in the best interests of OZ Minerals’ and its stakeholders.”