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March 31, 2008
SA is anxiously awaiting for the copper and uranium mining boom to happen so that it can join the high speed economies of WA and Queensland in Australia's two speed economy. SA is in a state of suspended longing as it stands on the verge of a boom, despite government concerns that BHP is backing away from value-adding processing in favour of exporting all expanded production as copper ore concentrate rather than smelting into metal, as it does currently. Such a move would reduce BHP Billiton's capital spending.
Digging up the rocks will be undertaken by BHP Billiton over the next decade. This expansion of Olympic Dam will require a desalination plant on the coast of the Upper Spencer Gulf to provide the extra 120Ml/day of additional water. The water will then be pumped 320 km north to Olympic Dam, which is 600km north of Adelaide.
That expansion will need to be powered by electricity. South Australia has been an importer of electricity for several years and its power distribution network was stretched to capacity to meed the demand during the heatwave. Yet BHP Billiton will need nearly half of South Australia's current electricity supply to power its copper and uranium mining at Olympic Dam. It will require 690 megawatts to run the operation with 60 megawatts needed to run the desalination plant. BHP Billiton currently uses 120 megawatts.
So where is that extra 570 megawatts of power going to come from?
The Rann Government, which routinely lectures the rest of the nation on climate change and the need to increasingly source energy from renewable energy has not imposed any mandatory requirements on BHP Billiton to source renewable energy.
The technology to source base-load renewable energy from "hot rocks" geothermal sources in the north of the state is not proven; whilst gas-fired power stations take three years to build if the option is to pipe gas from Queensland. Does that leave coal-fired power stations supplying the vast amount of base-load power Olympic Dam requires?
Does that mean SA becomes a greenhouse pariah as BHP Billiton turns to coal-fired power stations at a time when Ross Garnaut's report argues that power generators not be compensated in a carbon trading scheme?
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Gary,
BHP Billiton's current mine operation uses about 32 ML/day from the Great Artesian Basin (GAB). This is within BHP Billiton’s licensed limits of 42 ML/day. That limit should be reduced as it is mining water. The extra water should come from the desalination plant.