AU$916m copper mine project approved in South Australia
Australia’s largest undeveloped copper project – the $916 million Carrapateena mine development – has been approved.
The Gawler Craton project – which will create about 1,000 new jobs during construction and 550 on-going through its operational phase – was green-lit by OZ Minerals (https://www.ozminerals.com/), which set up headquarters in the South Australian capital Adelaide in 2015. The company said feasibility studies “confirmed the financial robustness of the long life, low cost mine”.
The first phase of the project will kick off next month, with more intensive work to proceed by mid-next year, subject to mining lease approvals, with first production expected in late 2019.
“Significant expansion potential”
The company today announced board approval for development of the project, which has a net present value of AU$910 million and a 20 per cent internal rate of return, with pre-production capital expenditure of AU$916 million.
The copper-gold project lies around 160km north of Port Augusta and 100km southeast of Olympic Dam. It was bought by OZ Minerals in 2011 and its development has been enthusiastically promoted by the South Australian Government, with Premier Jay Weatherill launching its construction last November.
In its half-year financial results announcement to the stock market this morning, OZ Minerals declared that: “the board’s confidence in the economics, constructability and operability of Carrapateena has seen development approval granted for the project”.
“This high-quality project with significant expansion potential is proceeding at pace and first concentrate production is expected in [the fourth quarter of] 2019,” the company said.
OZ Minerals reported operating cash flow of AU$93.5m in the first half of 2017, supporting “a significant cash balance of AU$624.5m with no debt”, allowing for continued investment in the Carrapateena project, as well as in development of its West Musgrave copper and nickel mine in Western Australia.
1,000 new jobs, from construction to production
OZ Minerals CEO Andrew Cole said the decision “will bring jobs, investment and local supplier opportunities into the Upper Spencer Gulf region and beyond”, with an estimated 1,000 jobs created “from construction through to production”.
The company said in a statement that it would prioritise local procurement and employment “where possible”. “The strong support we’ve had from the local community, local government, Kokatha Aboriginal Corporation and pastoralists has been instrumental in getting Carrapateena to this point,” said Mr Cole in a statement. “We’ll continue our conversations with local people, as we undertake the next phase of investment.”
The mine has a projected operating life of 20 years, although OZ Minerals’ CEO said “there is potential to extend its operating life through uncovering potential new deposits in the area”. That sentiment was echoed by Mineral Resources Minister Tom Koutsantonis, who said: “We are seeing the beginning of what I think will be a very large copper boom throughout SA.”
The mine is expected to net the South Australian Government in the region of AU$30 million per annum in mining royalties.