BHP’s $840m investment in Olympic Dam can be seen as a vote of confidence in SA’s copper future. Image: BHP
With the global energy transition fuelling unprecedented demand for copper, SA’s vast mineral wealth is positioning the state as a cornerstone of the decarbonised future.
If copper is driving an electrified future, South Australia has taken some major steps to fortify its position as the country’s copper powerhouse.
As a case in point, BHP’s recent $840 million investment in Olympic Dam has positioned the state to become a primary provider on the global stage.
Copper and other critical minerals such as lithium, nickel and cobalt are becoming more pivotal as the shift to clean energy systems continues to drive demand, ultimately painting a picture in which the sector is emerging as a major force in mineral markets.
Copper plays a critical role in electrification because of its electrical and thermal conductivity, ductility and corrosion resistance. It is often called the “metal of electrification” since almost every technology involved in generating, transmitting, storing, or using electricity relies on it
Speaking at the Asia-Pacific’s International Mining Exhibition (AIMEX) in Adelaide, BHP group procurement officer Rashpal Bhatti said the industry is “part of that copper revolution”.
“If you thought that the electrification revolution was only in the early-1900s, you’re mistaken; we are in the midst of the second electrification revolution here and now, and the demand for copper in that electrification revolution is paramount,” he said during his keynote presentation. “We, all of us, find ourselves in a very privileged place to be right in the middle of its heart.”
Driving the next phase of growth
BHP’s Olympic Dam investment is evidence of that revolution.
The Big Australian is preparing to make a final investment decision (FID) by mid-2027 for a two-phase smelter and refinery expansion at site. Phase one would lift refined copper output to 500,000 tonnes per year in the early-2030s, and a second phase could potentially take it to roughly 650,000 tonnes per year by the mid-2030s.
Olympic Dam has consistently produced more than 300,000 tonnes of copper annually for the last three years, with BHP chief operating officer (CEO) Edgar Basto saying that the miner’s portfolio will help grow the precinct’s annual copper base from 1.7–2.5 million tonnes.
“We are progressing a series of strategic projects that will strengthen our base business and help lay the foundations for future growth,” he said.
Copper has long been a key goal for SA when it comes to economic growth and contribution, with the state hosting 68 per cent of Australia’s economic demonstrated resources of the mineral, according to Geoscience Australia.
When South Australian Chamber of Mines and Energy (SACOME) CEO Nicola McFarlane spoke at AIMEX, she too underlined the central role SA’s resources sector plays in the economy and the global energy transition.
She said the copper sector contributes 6.4 per cent of SA’s gross state product and has seen direct employment surge by 86 per cent in the past five years.
Today, she said, one in 23 full-time jobs in the state is supported by mining and resources activity.
More mining, not less
Decarbonisation, relevant to copper mining, has also been a hot topic, but it is something McFarlane said will not diminish the importance of the mining process but rather increase demand for SA’s commodities.
“Decarbonisation doesn’t mean less mining, it means more mining,” she said.
On the same note, clean energy can be more mineral-intensive as compared to its fossil fuel counterparts. According to the IEA’s assessment of energy policies currently in place or announced, countries around the world are on track to double overall mineral requirements for clean energy technologies by 2040.
While decarbonisation signals a decline of fossil fuel extraction, it accelerates the need for minerals like copper as a step away from emitting greenhouse gasses. But the balance must be considered, with the IEA citing that a typical electric vehicle (EV) requires roughly six times more mineral inputs than a petrol car and an onshore wind plant needs around nine time more minerals than a gas plant.
By the same token, meeting the goal of limiting global temperature rise to below 2°C will require a fourfold increase in mineral demand for clean energy technologies by 2040.
For SA, a step to tackling these requirements could prove to be more within reach According to Bhatti, despite the significant organic copper growth that BHP has seen in the state, there are equal, if not greater, strides being made in drawing down the company’s emissions and “ensuring that we displace diesel as quickly as possible”.
“We’re very fortunate that in this part of the world we have access to the copper province in South Australia, and the growth that we have planned in all three of those assets [Olympic Dam, Prominent Hill, Carrapateena] are immense,” he said.
“Not just from exploration, concentrator or a smelter point of view but also working hand-in-hand with the government and looking at Northern Water to bring desalinated water from the south to the north where we would absolutely need it.”
Also speaking at AIMEX, SA’s Department for Energy and Mining chief executive Paul Martyn told the audience that the state’s world-class mineral and energy reserves make it an attractive place for mining companies to do business.
Likewise, he said the integration of mining and energy industries is creating significant opportunities while also contributing to global decarbonisation efforts.
“We have a unique combination of resources and renewable energy capability, which positions SA to be at the forefront of the global energy transition,” he said.
Taking a similar stance during his own AIMEX keynote, SA Treasurer and Minister for Energy and Mining Tom Koutsantonis said the state is one “on the move” and that mining is “now a pillar of the South Australian economy”.
“[AIMEX] delegates will see what is possible here in South Australia, whether it’s innovation and data, automation and technology, where it means pioneering working productivity, safety and sustainability,” Koutsantonis said.
The minister believes the mining industry’s investment in leadership and growing the supply chain is helping in growing Australia’s prosperity.
“Our state comprises about six to seven per cent of the country’s economic output, but mining is becoming one of the largest sectors within South Australia, and hopefully over the next decade, we’ll see that dramatically increase,” he said.
Koutsantonis as clear in echoing McFarlane’s thoughts on the ongoing importance of the industry.
“The world is changing dramatically, and we’re seeing the shift towards decarbonisation,” he said. “And that decarbonisation does not require less mining, it requires more mining.”
This feature appeared in the November issue of Australian Mining magazine.