Home' InDaily : July 16th 2010 Contents www.independentweekly.com.au
3The Independent Weekly
news July 16 - 22, 2010
Hole lot of trouble
BHP Billiton s Clark Shaft at
Olympic Dam is set to return
to full production, ending
a nine-month lull in copper and
But the news comes as
speculation again surfaces about
the company s long-term plans for
Clark Shaft, which is 7m wide
and almost 1km deep, accounts for
more than 75 per cent of the mine s
production activity. Last October,
an ore skip holding 34 tonnes had
almost reached the top of shaft
when it suddenly snapped clear and
plummeted 800m to the bottom.
The shaft has been closed since.
Workers and engineers at the site
have told The Independent Weekly
that repairs and re-installation have
been completed and the shaft is set
to return to full capacity.
BHP is expected to confirm the
production upgrade in its quarterly
production report to the stock
exchange on July 21. Its last report
(for the March 2010 quarter) showed
a year-on-year fall of copper output
of 19 per cent across the entire
group and a drop of 90 per cent in
A return to full production will
be a welcome relief for the company
and the hundreds of workers who
were placed on other projects, some
at other mines interstate.
The company also moved this
week to address speculation it had
gone cold on expansion plans for
The Australian Financial Review
reported on Monday that BHP
Billiton s plans for an open-cut
expansion were in doubt.
According to the AFR, BHP
CEO Marius Kloppers was "wary
of committing to the project" and
expansion plans have still not been
outlined, despite the company
receiving ownership of the mine
five years ago.
But the company responded by
saying it remains on track for a final
decision in 2011.
"The timetable remains the
same," BHP spokesperson Amanda
In the five years since BHP-B
bought out Western Mining
Corporation, the mine s expansion
has been one of the state s hottest
Within hours of the June 2005
ownership change, Premier Mike
Rann was spruiking a mining boom
that never happened.
I am absolutely delighted BHP
has secured ownership of the mine.
We now hope to get the go-ahead
for the expansion within the next
12 months," Mr Rann said after
a meeting with BHP s then chief
executive, Chip Goodyear.
He went even further, putting
a price and jobs number on the
project. "A go-ahead for the
doubling of the mine would mean
a $5 billion expansion involving
10,300 jobs in the construction
phase and an additional permanent
workforce of 8700.
History shows the 2006 boom
didn t eventuate.
Fast-forward to 2008 and it
seemed the Government had not
learnt the lesson that mining is a
complex business and nothing is
Deputy Premier and Treasurer
Kevin Foley said in June 2008 he
was certain the expansion would
proceed and an open-cut mine
would be developed.
"Absolutely," Mr Foley said in
response to questioning. "The BHP
expansion will go ahead. It will be
the largest open-cut mine in world
history and ... hundreds upon
hundreds of millions of dollars are
Asked if the mining method was
in any doubt he said: "Not in my
assessment and the information I
have been provided with."
Five years on from the early
boom-town talk and the highly
spruiked expansion seems as far
away as ever.
BHP briefed the State Opposition
on the project two weeks ago, and
shadow mining minister Mitch
Williams said later he believed it to
be at least two years from serious
"The briefing didn t address
those issues. In fact, the timetable
remained the same as it had been
the last time we were briefed," Mr
"But we are hearing from
engineering circles that BHP has
gone cold on the project. And it s my
gut feeling that the enthusiasm isn t
quite there any more."
But BHP officials point out
that around 200 engineers are
still working on the expansion
project, making assessments on
water sources, tailings issues, and
methods and costs of removing the
300m of over-burden that covers the
ore body. "Work is progressing and
the timetable remains the same as it
was when we last briefed MPs," Ms
Adelaide s engineering
community remains abuzz about
prospects for the mine.
The most common theory is that
the rising cost of the project (from
an original $5 billion to the latest
confirmed figure of $22 billion)
suggests that an expansion of the
underground mine, rather than
open-cut, is a more profitable
As we ponder the fifth
anniversary of the Premier s
premature announcement of a
2006 start date for the expansion,
investors and analysts might
be best served by sticking to the
official -- and rare -- statements that
come from BHP.
The earliest this project can go
before the board for consideration is
mid- 2011. And that will be the sixth
anniversary of the boomsayers who
are now looking like they had got a
little bit too excited.
Moves to establish a powerful
national authority to manage and
control Australia's Great Artesian
Basin may impact on the Olympic
A report released yesterday by
Australia's major water utilities
estimates demand for water will
increase by almost a trillion litres by
mid-century. That increased demand
will put even more pressure on the
artesian basin, a vast underground
water reservoir which underlies much
of eastern Australia, including South
The basin was tapped a century
and a half ago, with deep bores sup-
plying water to pastoralists and rural
communities. Twenty-two towns now
rely on it for all their water needs,
but the basin is now being emptied
faster than it can be recharged.
The existing Olympic Dam mine
already uses 35 million litres of
water a day from the basin. The
company gets this without cost under
a special 1982 Act of Parliament
which over-rides every other piece of
legislation, including safeguards in
mining and environment protection
The company is licensed to take
up to 42 million litres of water a day.
Unless the water is protected and
severe limits are imposed, some of
those 22 towns may become ghost
towns and when the bores dry up
pastoralists will have to move out,
just like the Riverland irrigators have
"It's a very, very important
resource and we need to make
sure that we manage it properly for
future generations," Queensland
Opposition Leader John-Paul
Langbroek said this week.
Mr Langbroek called for the
establishment of a national body,
akin to the Murray-Darling Basin
Authority, to manage the basin.
"In the last couple of years
especially -- and it's now reaching a
bit of a crescendo -- we've got almost
the equivalent of the Gold Rush," he
said about the basin.
An existing Great Artesian Basin
co-ordinating committee, which has
representatives from state, territory
and federal governments, can offer
"advice" but has no real power to
protect the resource.
The prehistoric underground water,
which fell as rain on the western
side of the Great Dividing Range up
to a million years ago, has since
percolated underground and flows at
a mere one to three metres a year.
The basin is the largest and
deepest artesian basin in the world,
covering more than a quarter of
the continent. It underlies most of
Queensland, the south-east corner of
the Northern Territory, the north-east
part of South Australia, and northern
New South Wales.
Drowning their sorrows over basin
Coorabulka Station manager Alistair Malone south of Boulia in western Queensland:
the basin is essential for inland pastoralism.
Photo: Vicki Wilson, cour tesy ABC
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