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BHP approves investment to extend life of Spence copper mine
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE
Release Time IMMEDIATE
Date 17 August 2017
Location Melbourne, Australia
Release Number 20/17
BHP approves investment to extend life of Spence copper mine
BHP today announced approval of capital expenditure of US$2.46 billion for the
Spence Growth Option (SGO) at the Spence open-cut copper mine in northern Chile,
which will extend the mine life by more than 50 years.
BHP Chief Executive Officer Andrew Mackenzie said the SGO project supports
BHP’s strategy to deliver near-term, valuable copper production.
In the first 10 years of operation, incremental production from SGO will be
approximately 185 ktpa of payable copper in concentrate and 4 ktpa of payable
molybdenum, with first production expected in the 2021 financial year. The current
copper cathode stream will continue until the 2025 financial year. The project will
convert 1.3 Bt1 of Measured and Indicated Mineral Resources to hypogene sulphide
Ore Reserves.
SGO was rigorously evaluated using BHP’s Capital Allocation Framework and, at
mid-case consensus prices, has an expected internal rate of return of 16 per cent
and an expected payback period of 4.5 years from first production.
Chief Executive Officer, Andrew Mackenzie, said that “Execution of the Spence Growth
Option will create long-term value for shareholders in one of our preferred commodities.
The project significantly extends the life of our Spence operation and unlocks the
potential of the large, quality resource.”
“SGO has been extensively studied and we have made significant improvements to
project cost and design so that it is able to compete in our portfolio of attractive
development options.”
The SGO project will draw on experience developed in the construction of the
Organic Growth Project 1 concentrator and desalination plant at Escondida, and
create up to 5,000 jobs during the construction phase. The project includes the
design, engineering and construction of a conventional large-scale sulphide
1
concentrator for both copper and molybdenum with a 95 ktpd nominal ore throughput
capacity.
In addition, SGO will require a new 1,000 litre per second desalination plant located
at Mejillones Bay and a 154 km water pipeline from the plant to the Spence mine site.
These will be built and operated by a third party under a Build, Own, Operate and
Transfer contract, which has been separately awarded, with nominal, undiscounted
value of lease payment obligations over the 20 year contract term totalling US$1.43
billion.
1. Hypogene Measured Resources of 520 Mt @ 0.47%TCu, 190 ppm Mo; Indicated Resources
of 800 Mt @ 0.45%TCu, 130 ppm Mo. Reported for the year ended 30 June 2016 in the 2016
BHP Annual Report which can be found at www.bhp.com. The company confirms that it is not
aware of any new information or data that materially affects the information included in the
original market announcement and, that all material assumptions and technical parameters
underpinning the Mineral Resource estimates continue to apply and have not materially
changed. The company confirms that the form and context in which the Competent Person’s
finding are presented have not been materially modified from the original market
announcement.
Further information on BHP can be found at: bhp.com
Sponsor: UBS South Africa (Pty) Limited
Media Relations Investor Relations
Australia and Asia Australia and Asia
Ben Pratt Tara Dines
Tel: +61 3 9609 3672 Mobile: +61 419 968 734 Tel: +61 3 9609 2222 Mobile: +61 499 249 005
Email: Ben.Pratt@bhpbilliton.com Email: Tara.Dines@bhpbilliton.com
Fiona Hadley Andrew Gunn
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Email: Fiona.Hadley@bhpbilliton.com Email: Andrew.Gunn@bhpbilliton.com
Amanda Saunders United Kingdom and South Africa
Tel: +61 3 9609 3985 Mobile: +61 417 487 973
Email: Amanda.Saunders@bhpbilliton.com Rob Clifford
Tel: +44 20 7802 4131 Mobile: +44 7788 308 844
Kester Hubbard Email: Rob.Clifford@bhpbilliton.com
Tel: +61 7 3227 5671 Mobile: +61 408 727 261
Email: Kester.Hubbard@bhpbilliton.com Elisa Morniroli
Tel: +44 20 7802 7611 Mobile: +44 7825 926 646
United Kingdom and South Africa Email: Elisa.Morniroli@bhpbilliton.com
Neil Burrows Americas
Tel: +44 207 802 7484
Email: Neil.Burrows@bhpbilliton.com James Wear
Tel: +1 713 993 3737 Mobile: +1 347 882 3011
North America Email: James.Wear@bhpbilliton.com
Bronwyn Wilkinson Cristian Coloma
Mobile: +1 604 340 8753 Tel: +1 713 235 8902 Mobile: +1 346 234 8483
Email: Bronwyn.Wilkinson@bhpbilliton.com Email: Cristian.CA.Coloma@bhpbilliton.com
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BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
LEI WZE1WSENV6JSZFK0JC28 LEI 549300C116EOWV835768
Registered in Australia Registered in England and Wales
Registered Office: Level 18, 171 Collins Street Registered Office: Nova South, 160 Victoria Street
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Members of the BHP Billiton Group which is
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