BHP Billiton Ltd, the world's biggest mining company, is likely to delay approval on a proposed $33-billion expansion of the Olympic dam mine in Australia for two years due to falling commodity prices, The Australian newspaper over the weekend reported.
The Melbourne-based company will delay a decision until 2014, the newspaper said, citing documents it had obtained from an unidentified consulting firm.
The expansion of the Olympic Dam project, the world's largest uranium mine, would transform Australia's biggest underground mine into one of the largest open pit mines in the world and increase production of uranium by nearly fivefold, gold production eightfold and copper by almost fourfold.
The Olympic Dam once completed, is expected to contribute an estimated $45 billion annually over the next 40 years to the Australian economy.
BHP Billiton had in October 2011 committed to spend $1.2-billion for the first phase of the expansion of the Olympic Dam project, (See: BHP Billiton approves $1.2 billion for Olympic Dam mine development) but slumping global commodity prices and rising costs has pushed the Anglo-Australian miner to follow arch rival Rio Tinto in reassessing their long-term expansion plans, mainly because of the falling demand from China.
In April, Rio Tinto ended talks to take part in the $9.4 billion coal port expansion in Queensland, citing economic volatility and higher costs.
Apart from the Olympic Dam, the board of BHP Billiton has to approve spending around $35 billion on two other major projects by the end of the year, an iron-ore port expansion in Western Australia and a potash project in Canada.
BHP Billiton's chairman Jac Nasser had said in May that the company will fall short on its five-year spending target of $80 billion due to a slump in commodity prices and costs escalating by as much as 100 per cent.
After acquiring a Galilee coal block in the Galilee Basin in Queensland from Australia's Linc Energy Ltd, for around $2.68 billion in 2010, diversified Indian conglomerate Adani Enterprises has committed to spend $6.9 billion in developing the mine, rail and port project.
Last year it paid $1.8 billion for a 99- year lease of Abbot Point Coal Terminal 1 in North Queensland and has plans to invest close to $750 million to expand the port.