Olympic Dam Taskforce CEO to doubters: We're planning 10,000-strong village, already building airstrip for 737s

Mineweb reports a senior state official in South Australia who is also CEO of the so-called Olympic Dam Taskforce on Tuesday revived hopes that the $30 billion expansion of the existing underground operations would go ahead after all.

Doubts were raised about the viability of the project when the Chairman of owners BHP Billiton confirmed earlier comments from BHP's top execs about scaling back its most ambitious programs saying it will not spend the $80 billion previously set aside for expansion by 2015.

While most analysts expect BHP will continue to pour money into iron ore in Australia, the company's other megaprojects – Olympic Dam, expansion of its US shale gas operations and Jansen potash project in Canada – may be put on the back burner.

The government official Paul Heithersay told a conference in Broken Hill, New South Wales that Olympic Dam expansion was "a project with a 100 year mining life, so a glitch this year was unlikely to sway a company that thinks well ahead":

He said the company has already cleared a substantial amount of sand cover, has ordered a significant amount of long lead-time machinery and equipment and has begun planning for the major village expansion – for 10,000 people — and begun building a new airstrip capable of handling 737 aircraft.

The expansion will see a 270 kilometre long electricity transmission line, a 400 km pipeline, a large desalinator plant, a 105 km long railway link from Pimba to Olympic Dam.

The giant copper-gold-uranium-silver project in South Australia's outback is set to become the world's biggest open pit. BHP has already received government approval for the mammoth $30 billion expansion of Olympic Dam and the company's board will make a final decision on the project this year.

The planned open pit mine would be adjacent to the current Olympic Dam underground operation. An idea of the olympian effort required to construct the mine and the size of the undertaking is clear from the fact that trucks will haul overburden 24/7 for five to six years just to reach the ore body.

The combined operations would mine 72 Mt ore per year and would produce 750,000 tonnes refined copper, 19,000 tonnes uranium oxide, 800,000 gold ounces and 2.9 Moz of silver per year.