Darwin as preferred BHP Olympic Dam port?

[Ajax]

In Australian Financial Review today-page 21

http://www.afr.com/home/login.aspx?EDP://20081030000030478302&section=industry-metals_mining

"BHP Billiton will name Darwin as the preferred port for shipment of copper concentrate and uranium for its huge Olympic Dam expansion when it releases its environmental impact statement on the project next year"

BHP plans to use the Adelaide to Darwin railway line.

Not using South Australian ports

"Instead the miner will expand storage and loading facilities at the East Arm Port in Darwin, where it already exports 1200 tonnes of uranium from Olympic Dam"

Analysts to be briefed on the Olympic Dam project which could cost up to $20 billion this Friday (31 October)

Other articles on the same story:-

http://www.centralianadvocate.com.au/article/2008/10/21/3258_news.html

http://www.ntnews.com.au/article/2008/10/25/12025_ntnews.html

http://www.abc.net.au/news/stories/2008/10/23/2398874.htm?section=business

 

[want2bewealthy]

Certainly the place to invest.

 

[Belu]

want2bewealthy - what kind of yields is Darwin producing at the moment on $200-250k purchases?

 

[want2bewealthy]

If you can find anything around that price anymore you're dong very well, maybe a dingy one bedder somewhere but for anything 'descent' with 2 bdrms you're looking at the higher 200's,

on say a 280k 2 bedroom unit almost anywhere, Darwin CBD, Northern Suburbs, Palmerston, it would yield approximately $400p/w.

In saying that the vacancy rate for Northern Burbs is at 0% right now and Darwin 0.5%, palmerston around 0.8%

Ive looked at larger complexes within the CBD but they dont seem like good investments to me personally, the newer ones rent very high.

I have a friend who owns a 2br unit in the northern suburbs, purchased for 225k a few years ago and is renting for $510p/w

Personally mine in the same area are going for $400p/w but the current leases were started a few months ago when demand was slightly lower than right now, PM said we may be able to get $450p/w but they sat for a week and I decided to drop to $400, no worries from then on in.

I purchased 1x for 250k 2 years ago and the other for 290k 3 months back.

 

[Sunfish]

Thinking beyond RE, BHP must think the lull in shipping lease rates must be temporary or they would do the longer trip by ship. The rail transport would be dearer but with controllable costs.

That's telling me that resources ain't dead yet.

 

[AUSPROP...]

what does it cost to build a 4x2 in Darwin?

 

[boomtown]

Its not just rail cost - significant politics are involved in the transportation of radioactive materials.


In this case Darwin got the short end of the stick imho.

 

[sash]

decision was probably made due to costs..as if it went through Whyalla...you would need to go through rough sea past Vic, Nsw, & Qld then onto China, India, & Russia.

From Darwin...it quick to China, India and China!

 

[Sunfish]

decision was probably made due to costs..

That's how I was thinking, but at the moment teh Baltic Dry Index (A measure of shipping costs) is very low because of the perceived recession in world trade. If BHP thought current costs were to remain they would (IMHO) use ships all the way. As they didn't I take that as +ve on world trade.

 

[Ausprop]

Its not just rail cost - significant politics are involved in the transportation of radioactive materials.


In this case Darwin got the short end of the stick imho.

I don't know much about it but... i didn;t think it was activated in anyway? no value add at all.

if we were smart it would be charged and ready to go. and when it's spent, bring it back here and hand us all your cash.

but no - too politically unpalatable. easier just to give it all away

 

[battle on]

A couple of years ago I did some work at Olympic Dam and I dont believe theres too many radio active problems. The product is stored in 44 gallon drums and whilst there are some security and safety measures in place they are not as if it is a potentially dangerous material. There is a lot more security with the gold transport.

At the time copper was and I think still is the main produce of the mine and I would think any decisions made would be based on this rather than Uranium due to the sheer quantities transported. It sounds a financially sensible move to me.

 

[Sunfish]

With thanks to a poster on HC:

Annual Production
8.2Mt ore containing 204,300t of copper, 4,300t of uranium oxide, 102,200oz of gold and 896,000oz of silver (2005/06)
Full specifications
The Olympic Dam copper-uranium mine and plant is situated in South Australia, 580km north west of Adelaide. Opened in 1988, Olympic Dam is wholly owned and operated by WMC Resources, which discovered the deposit in 1975. An A$1,940m expansion programme was completed in 1999, raising its capacity to 200,000t/y of copper and 4,300t/y of uranium, plus gold and silver. In mid-2005, BHP Billiton gained control of WMC Resources in an A$9.2bn take-over.

In 2007 BHP Billiton announced that it would undertake an $A6–7bn expansion of the Olympic Dam mine. The company says that annual ore production will increase up to 70 million tonnes, a seven-fold increase if the expansion proceeds. Copper production will increase from approximately 180, 000t a year to approximately 730,000t.

This would include 500,000oz of gold, 500,000t of copper and 15,000t of yellowcake. Existing average gold production is 80,000oz pa. The additional proven reserves of uranium now make Olympic Dam one of the most promising uranium mines in the world.

 

[Ajax]

Olympic Dam - world’s largest uranium mine, fourth largest copper mine and sixth biggest gold mine?
Creation of the massive Olympic Dam pit will see mining of ore and waste involve removal of one million tonnes per day from this remote South Australian copper-uranium-gold mine and the State Premier says that by then this mine will surpass all of Canada’s uranium production.

http://www.mineweb.com/mineweb/view/mineweb/en/page36?oid=55045&sn=Detail

Author: Ross Louthean
Posted: Thursday , 19 Jun 2008

ADELAIDE -

In a big picture speech to the AusIMM International Uranium Conference in Adelaide the South Australian State Premier made it clear what impact BHP Billiton's detailed study will have on transforming Olympic Dam from a big underground mine into an even larger open pit.

The quest to develop an open cut mine will involve the removal of between 300-400 metres of sterile cover over the ore system.

Rann said this development involves the biggest order of trucks in world history and will see Olympic Dam become the world's largest uranium mine (having 40% of global resources), the fourth largest copper miner and the sixth biggest gold mine.

"That's all located within a single ore body," he said.

 

[Ausprop]

involves the biggest order of trucks in world history

and still can't manufacture them here. laughable if not so sad

 

[THEHEATH]

Olympic Dam expansion looks like being delayed. Can't find the link, but it was in the news today. Predictably mining looks like taking a hit all over the place http://www.theaustralian.news.com.au/business/story/0,28124,24583129-643,00.html

 

[Ajax]

Can't see delay in Olympic Dam expansion mentioned in the article in the Australian

"It is not just the juniors that is feeling the pinch. The majors -- except for BHP -- have all pointed to the need to review operations. Rio Tinto said earlier this month that it would delay planned divestment of assets, review near-term spending on growth projects and curtail some higher-cost aluminium production.

However, BHP has denied it needs to review operations or cut back on production to address the volatile climate. Instead it tells the market it is in a position to keep investing in the cycle and cash in on opportunities.

Chief executive Marius Kloppers told investors in Sydney this week that a lack of liquidity in mining was taking out a substantial amount of investments that had been mooted or predicated. BHP, however, could capitalise on opportunities as others faltered. "

 

[THEHEATH]

Yes, I know, I said I couldn't find the link. But it's back now : http://www.theaustralian.news.com.au/business/story/0,28124,24583125-643,00.html
BHP delays opening of world's biggest pit

Matt Chambers | November 01, 2008

BHP Billiton has pushed back the start date for its giant Olympic Dam copper and uranium expansion until at least 2015.

 

[Sunfish]

I don't wish to understate the washing machine us investors are in, but I doubt Kloppers an Co have such a short term view.

This cooling is in their favour: Input costs are moderating. By the time they spend this money the authors and economists will be picking over the bones of this stuffup and publishing their books, but BHP will be doing what they do best. Digging!

 

[Sunfish]

BHP Billiton has pushed back the start date for its giant Olympic Dam copper and uranium expansion until at least 2015.

OK! But I am surprised.

 

[THEHEATH]

I don't wish to understate the washing machine us investors are in, but I doubt Kloppers an Co have such a short term view.

This cooling is in their favour: Input costs are moderating. By the time they spend this money the authors and economists will be picking over the bones of this stuffup and publishing their books, but BHP will be doing what they do best. Digging!

Digging alright!
"Rio sees the project, which will take five years of earthmoving just to get to the orebody, as long, expensive and risky and says shareholders should know the cost of it if they are considering swapping their shares for BHP's."