BHP awards major copper contract

BHP (ASX: BHP) has awarded an engineering, procurement and construction management (EPCM) contract to a joint venture between Fluor Australia and Hatch, to support the proposed expansion of its copper smelter and refinery facilities in South Australia.

The contract will be executed in stages as BHP progresses towards a final investment decision on the smelter and refinery expansion in H1 FY27 and through to subsequent construction.

The first stage of EPCM activity represents more than $40m investment to lead overall strategy and planning through the project’s study phases.

BHP group procurement officer Rashpal Bhatti says Fluor and Hatch are experienced global EPCM partners with significant shared experience in delivering mega projects, who will bring the right level of scale and expertise to help the company progress its copper growth plans in South Australia.

“The growth potential for Copper South Australia is exciting and this first stage of EPCM works will be key as we progress the proposal for an expanded copper smelter and refinery at the heart of South Australia’s growing copper province towards a final investment decision,” he said.

“It is critical that we prudently manage our spending to achieve the vision that BHP shares with many others to grow copper production in South Australia and we have worked closely with Fluor and Hatch on a contract structure that supports this.”

BHP asset president Copper South Australia Anna Wiley comments on the development.

“BHP is building momentum in South Australia and this is another step forward in our strategy to increase the production of South Australia’s high-quality copper resources to support the global energy transition,” she said.

“BHP has established a world-scale copper province in South Australia and we are working at pace to progress our plans to lift production further over the coming decade.”

According to BHP, global copper demand is forecast to increase by around 70% by 2050, driven by ongoing growth in traditional copper uses such as house construction and household appliances, the global transition to electric vehicles and renewable energy and growth in data centres.

Last year, BHP outlined a pathway to increase copper production in South Australia to more than 500,000t of refined copper cathode a year by the early 2030s and a strategy to deliver up to 650,000t from the mid-2030s — up from about 322,000t last financial year.

Fluor mining and metals president Harish Jammula says the company is excited to support BHP on its growth plans to increase production of refined copper cathode in South Australia.

“Accelerated expansion of the downstream processing sector is increasingly important to secure local supply of mined materials, become independent of overseas supply and drive sustainable production technologies,” he said.

Phase one would involve an upgrade of the existing smelter and refinery at Olympic Dam, to a two-stage smelter and extension of refinery facilities with capacity to produce more than 500,000tpa.

A final investment decision on phase one of the smelter and refinery expansion is currently expected in the first half of FY27.