Global miner BHP Billiton has delayed its planned $20-billion Olympic Dam copper expansion today, adding no major projects would be approved in the year to June 2013, as it battled escalating capital costs.
BHP posted a 35-per cent drop in second-half profit along with its first fall in annual profit in three years as it faced falling commodity prices with China's economic growth slowing, ending a difficult earnings season for the world's biggest miners.
Weak prices for iron ore, copper, coal, nickel and aluminum have hit big miners hard as economic growth in big-buyer China slowed this year to what was expected to be its weakest pace in over a decade.
Expansion of operations at the Olympic Dam, the world's fourth-largest known copper deposit and largest uranium source, was one among three mega projects that the BHP board was to come up to the company's board for final approval by December 2012. The project was among an $80 billion pipeline of projects that BHP expected to slow down.
According to the Anglo-Australian giant, no major new projects would be approved before June 2013.
According to BHP CEO Marius Kloppers, the company needed to take a fresh look at the Olympic Dam expansion in view of the high project costs, partly due to a strong Australian dollar, and volatile commodity prices, which would be persisting in the short term.