BHP seeks guarantees after 2016 hit at Olympic Dam: South Australia's biggest electricity user
BHP's giant Olympic Dam mining complex in the far north of South Australia.
BHP’s Olympic Dam mine, South Australia's single largest consumer of electricity, was exposed as vulnerable by 2016 storm and heatwaves that disrupted production and caused $100 million in lost production. In 2015, BHP had asked for a more reliable grid connection than the 275kV line at end of the grid via Port Augusta.
In 2009, BHP Billiton defined its typical annual electricity consumption as 870,000 MWh (or 125 MW) and its needs were likely grow by 20% with mine expansion. BHP is investing about $US2.1 billion to lift Olympic Dam name-plate copper production from the rarely achieved 200,000 tonnes a year to 330,000 by 2023.
The other big and expanding Gawler Craton mine operator is Oz Minerals. It is moving to double its South Australian mine fleet and copper production.
Concerns over power availability and security for the these far north ventures may force the need for their own power plant.
A possible solution linked to this need was a proposal to use liquefied natural gas from Victoria imported at Pelican Point, 20 kilometres south of Adelaide, where it would be converted, stored and used to fuel a power station.
The statewide blackout in October 2016 threatened to destroy its Olympic Dam copper processing plant. That power cut lasted two weeks. BHP was within 10 minutes of molten metal freezing in its smelter. This potentially would have required the plant plant to be replaced, curbing metal exports for between 12 and 18 months and costing about $3 billion. The miner lost power more briefly again in November 2016
Japan's Mitsubishi Corporation in 2018 was backing a $800 million joint venture working to solve South Australia's energy needs with a virtual pipeline project that would see liquid natural gas imports linked to a new power station.
The venture had been developed by a group of former BHP managers who work at Melbourne-based management consultancy Integrated Global Partners.
Mitsubishi invested $15 million to fully finance a feasibility study on the proposal to land imported shipments of liquid natural gas at Pelican Point.
