BHP expansion pull back boosts copper miner Diatreme
31 October 2012
Diatreme Resources, a company prospecting copper in central Queensland says its efforts had been boosted thanks to BHP Billiton's decision to cancel its expansion plans in South Australia.
Diatreme has received $8 million from Antofagasta Minerals, a Chilean company, to explore a corridor in the state.
According to Diatreme chairman Tony Fawdon, investment confidence had increased because copper prices would have fallen if BHP had gone ahead with its Olympic Dam expansion.
Meanwhile, mining contractors and suppliers would be under pressure after BHP Billiton's boss for its iron ore and coal business Marcus Randolph dropped hints of intensified efforts to pare costs in Pilbara by squeezing the margins of its major suppliers.
This comes after BHP also dropped its aspirational target of producing 450 MT of iron ore in the Pilbara. The company seems to be scaling down its target to over 300 MTPA, effectively giving up over $15 billion in annual sales revenue based on current prices.
Speaking to investors yesterday, Randolph, in a warning to BHP's contractors, said their days of margin growth were over.