OZ Minerals Ltd has announced that its board has given green signal for development of a new copper mine in South Australia that is estimated to cost around A$1 billion upon completion. The board approval will further accelerate the construction works. OZ Minerals expects the mine to start production by Q4 2019.
The Carrapateena copper and gold mine in South Australia mine is touted as the second largest copper mine in South Australia, next only to BHP’s Olympic Dam mine, having estimated reserves of 292 million tonnes of ore grading 1.31% copper and 3.64 million oz of gold. The mine’s production is estimated at nearly 65,000 tonnes of copper and 67,000 ounces of gold every year over a period of 20 years..
OZ Minerals Chairman Rebecca McGrath noted that the Carrapateena copper mine is the country’s largest undeveloped copper project. The project will generate thousands of jobs during the construction phase. Upon completion, it is expected to create around 500 permanent jobs in the region.
Company chief Andrew Cole stated that the development of the Carrapateena copper mine is only a stepping stone to bigger projects that the company plans to undertake in the near future. OZ Minerals would see that it associates with local companies during the construction phase. It aims to make maximum possible procurement of goods and services from local companies and communities. Also, the project would ensure utmost recruitment of locals. It is a historic moment for the company and an exciting day for South Australia, he added.
The project is not expected to lead to any new debt for the company, top company officials stated. The development will be partially funded with the company’s current cash balance of $625 million. The cash flow from the existing Prominent Hill mine will also be used to fund the development of Carrapateena mine.
Carrapateena is an iron-oxide copper-gold deposit located in South Australia on the eastern margin of the highly prospective Gawler Craton, nearly 160 kilometers north of Port Augusta. The company had purchased the project in 2011 at accost of more than $250 million and has been carrying out drilling operations and works on mine shaft and access tunnels. It expects the Mining Lease approval to be granted within six months, which in turn would kick start the planned second phase of the project scheduled to commence in Q2 of 2018. The project is expected to reach payback by 2024.