BHP Billiton dumps Olympic Dam, cites carbon and mining taxes

Australia not worthy of investment

Leigh Sales spectacularly failed to conceal her contempt for Tony Abbott on 7.30 yesterday, in equal measure shrill and patronising, and showing little if any respect for her guest – typical ABC in other words, where a non-Labor politician is concerned.

Accusing Abbott of being “loose with the truth” in linking BHP’s decision to abandon the Olympic Dam project, she refused to accept that the carbon tax and the mining tax could possibly have anything to do with it, because BHP boss Marius Kloppers had avoided mentioning them explicitly in the statement earlier in the day.

But as soon as he’s out of the country, guess what?

BHP Billiton head Marius Kloppers has told European investors that Australia’s carbon and mining taxes have helped to render the nation’s coal industry unworthy of further investment at this time.

Despite reassuring Australians that the taxes were not to blame for BHP’s mothballing of the $US30 billion Olympic Dam expansion, Mr Kloppers referred to both when telling British media that new investments in Australia’s coal sector would not be profitable. (source)

But isn’t that exactly what the carbon tax is supposed to do? Shut down our economy so that we create fewer emissions? It’s certainly working.

I assume we’ll be getting an apology from Leigh sometime soon, right?


  1. Deb Norris via Facebook says:

    Did they? I thought they sited drop in overseas prices and the next coming world recession! Altho I do agree and wld say that no doubt them taxes will eat into their projected profits! BOOHOO!

  2. Ian F Somerville via Facebook says:

    Wonder when or IF the ABC will report the TRUE FACTS ??

  3. Sales looked like a female dog guarding her pups when she fronted TA in that dreadful interview. She deserves nothig less than a good kicking!

  4. They should run an apology to Tony Abbot now

  5. bushwalker says:

    After that interview my thought was that Leigh Sales had morphed into Kerry O’Brien.

  6. Olympic dam is a URANIUM mine. Please note that coal is not uranium.

    Kloppers was referring to two different parts of his business in the two different addresses. Therefore, your title “BHP Billiton dumps Olympic Dam, cites carbon and mining taxes” is incorrect. He cites the taxes for stopping growth in the COAL sector of BHP, but as I said above, Olympic Dam is NOT A COAL MINE. Please fix the title accordingly.

    Tony Abbott also made this erroneous link that you have made in the title in a press release prior to his appearance on 7.30. That is why Leigh Sales attacked him – because he made link between two events which was completely erroneous. If a Labor politician had done the same thing, they would have received the same treatment.

    Because of the aforementioned errors, this article was, in my opinion, not worth the 5 minutes I spent reading it or the five minutes that I spent commenting.

    [REPLY – I marvel at your wit and sarcasm. Well done. The mining and carbon taxes are damaging the whole of the Australian economy, making ANY investment of ANY kind here unviable – including any expansion at Olympic Dam. You’d have to be really naive to think that the two parts of BHP’s business were so unrelated that they don’t affect each other…oh, it appears you are! You’ve had your little rant, now go away – Moderator]

    • The Loaded Dog says:

      It took you 5 minutes to read a 215 word article?

      I’ve got two words for you..

      Gonski Review.

      Soon, you too will be able to put up your hand and participate in class!

    • Now you, in turn, have wasted my 5 minutes.
      Olympic dam is a copper mine with uranium oxide (not uranium) gold and silver as byproducts . The net value of the uranium oxide produced is about 5% of the copper and copper concentrate.
      The Olympic dam development would result in a major increase in energy consumption, particularly electricity and includes a new 270km, 275 kV transmission line from Port Augusta and a 600 MW power station supplied by a gas pipeline from Moomba.
      The purpose of the carbon price and ETS is to increase the cost of those energy sources. Related capital costs are associated with the regulated requirements for renewable energy in construction and operation.

    • Zac speaks B-S

      No more needs saying.

    • I think we all know what the “B-S” stands for.

  7. What an interesting experiment. I’ve heard that the basis of Australia’s economy is it’s natural resources and commodities it sells. It looks like the ALP is determined to test that hypothsis.

  8. uhavitbad says:

    But the lost revenues will be divided up and given to the average serf. Only in left wing math can zero (or less than) be a sign of progress.

  9. agwnonsense says:

    The is always a PROBLEM when you spend money you don’t have. ESPECIALY when you create a situation where you are not going to get it. TAX discourages investment,end of story.

    • Simon Colwell says:

      To quote the late, great Milton Friedman, “there’s no such thing as a good tax”.

  10. Old Sailor Man says:

    The second act of PM Abbott should be to install someone like Peter Reith or AlwxDowner as CEO of their yaybeesee with carte blanche to clean the bottom feeders out.

  11. Kloppers and G

  12. Bill Robbins says:

    Nuts and raisins factory strikes again.
    When mining slows down and tax income slows down we have………Year Zero.

  13. Catweasel says:

    I thought that Leigh Sales performance was the simply the worst behaviour from an ABC Journalist I have ever seen and thats irrespective of the points she was trying to make with her guest.

    A verbal projectile vomit with pursed lips and and beady eyes….there was no disguising her contempt for Abbott even before he opened his mouth.

  14. Contrary to the comments of just everybody, from the Prime Minister, to the Treasurer, to the SA Premier, all the way down to Bolt and the talking heads at the ABC, the cost, availability, and guarantee of supply of electricity have had a profound effect on the final decision not to proceed with the OD expansion.

    The process used for the final recovery and purification of copper at OD is “electrowinning” – a form of low voltage high amperage electrolysis that uses massive amounts of electricity. OD is the largest consumer of electricity in SA, using more, in fact, than the entire city of Adelaide – or about 30% of SA’s entire output. Bringing the electrowinning tables online and taking them offline has to be done in cooperation with SA’s power supply providers, otherwise the resultant spikes would black out most of the state.

    Part of the planned expansion included BHPB building their very own, very large power station out at OD, to supply their own needs independent of the SA grid, which is becoming increasingly erratic and unreliable, due to its increasing quasi-reliance on windmills.

    But the SA government saw an opportunity to hide some of the growing problems caused by their own ongoing incompetence in the promotion of windmills, and insisted BHPB’s humungous new power station be connected to the grid, and its reserve spinning capacity be made available to cover the shortfall created by the state’s reliance on windmills. BHPB reluctantly agreed to this.

    So far, so good. But then the Federal government stepped in and decreed that this arrangement meant that BHPB was, in fact, an “energy provider”, and as such, had to source a specific, and ever increasing amount of the TOTAL supply (OD AND SA in general) from “renewable energy sources” – eg – windmills, in accordance with existing legislation covering all other “energy providers”.

    Since this defeated the entire purpose of the exercise, it was at this point BHPB Management threw up their arms in disgust and relegated the whole project into the “too hard” basket until some sanity returns to Australian politics, which isn’t likely to happen any time soon. That decision was taken over three months ago now, and BHPB have simply been waiting for an opportune time to announce it.

    • Interesting, thanks AndyG55, I didn’t know the exact reasons, but being involved in big-oil, but knowing people in big-minerals, (and also being a filthy denier – is that a trifecta I should be proud of?) I did hear that BHP-B had been demobilising various tradie-related contractors at OD for at least the last couple of months…

      Obviously it isn’t *just* the CO2 tax, or the MRRT, but I am very sure they did play a part when the bean-counters were giving BHP-B Australian operations the once-over after their significant decrease in profits. They exist to make money for shareholders, not to fill the state and federal treasury coffers, but that fact seems entirely lost on Labor supporters…

    • To the experts posts on OD, please do try a little research (2 mins Googling should do it) before posting ‘facts’. Here’s one link:
      “Quote from the article: ” Olympic Dam is a multi-mineral ore body. It is the world’s fourth largest copper and gold deposit and the largest known uranium deposit. It also contains significant quantities of silver. At Olympic Dam, BHP Billiton mines, processes, smelts and refines ore to final products. In recent years annual copper production has averaged about 180,000 tonnes, with 4,000 tonnes of uranium oxide, 80,000 ounces of gold and 800,000 ounces of silver.”

      Finally some other comments that are accurate, and AndyG55 hit the nail on the head. The bottom line is mining operations, including extraction/refining of ore are all ENERGY intensive operations. The MMRT and Carbon Tax both add operating/capital costs and the Green/Labor coalition have succeeded in making Australia too expensive/risky to do business in- hence the shelving of the open-pit expansion of OD.
      It is laughable that green schemes/renewable energy initiatives are ALSO responsible for this decision. How many jobs will be lost to “Windmills” in SA now?
      Face facts, a ‘Cleaner and Greener’ solution would be to build a modern Nuclear Reactor (stress on Modern- Fast Breeder Designs) on the OD site (or somewhere nearer to the city to reduce wasted transmission losses! ). We know this could provide base load to the whole of SA (and indeed the secure the energy needs of the whole of Australia, given our vast Uranium deposits.) but who has the guts and good scientific sense to do it?
      I hear you say- Coal is cheaper/dirtier and ‘healthier’.
      Meanwhile, we keep mining/selling yellowcake to third world countries- no problems!

      • The new OD would have used way more electricty than Adeliade.
        Near OD would be a very sensible place to build a nuclear reactor.
        One of the most geologically stable places in the world.

        Let Adelaide exist on their wind power, then make sure you get a nice profit if they want to use your solid reliable nuclear derived electricity.

        Darn RET and green tape are really pushing Australia down the S-bend. The CO2 tax and mining tax will just add more push.

        And when all industry and mining are gone ?

        Where to then, Australia ?????????????

      • ps.. shipping coal to OD really does seem pretty stupid, when you are actually mining uranium as a secondary mineral, doesn’t it. DOH !
        We really need to get our heads out of the sand.
        With out energy and mining resources we should be a manufacturing powerhouse, instead of a tadpole.

    • Andy, a slight exaggeration on OD’s electricity usage.

      Yes, they are the single biggest user of electricity, but OD would use (currently) approximately 1,000 GWh per year, at a max demand of 160MW.

      This equates to about 7% of SA’s electricity (14,000 GWh/year) and about 4.5% of max demand (based on 3400MW at peak).

      Adelaide CBD uses about 1,300GWh a year, so that statement is incorrect also.

      I would expect (from my understanding of the ODX project) that these numbers would double, but that would still leave them at half of what you’ve indicated.

      I agree that power costs were key in BHP’s decision. Just wanted to correct some facts.

      (this info is all available via AEMO and Electranet’s websites.)

  15. What does this say about Marius Kloppers?

    This is the man that sided with Julia Gillard about the need to put a price on carbon… a CEO of a mining giant that did not seem to know the difference between carbon and carbon dioxide, for which he was subsequently criticised.

    This is the man that sat down with two other mining giants and entered into an agreement with Julia Gillard over a mining super profits tax, at the exclusion of all the many other mining companies.

    And now this turd has the audacity to tell European investors that Australia’s carbon and mining taxes have helped to render the nation’s coal industry unworthy of further investment at this time!!!!

    He doesn’t dare say this in Australia for fear of offending Julia Gillard. What a creep!


    I just cannot understand why he is still the CEO of BHP.

    • Here, here, I agree with you 100%!

    • @ Mervyn – In case you forgot, BHP is a diversified company with global operations- not just in Australia. Kloppers as CEO is just moving his focus to cheaper countries that don’t have Sovereign risk like we do here. Maybe he had no choice but to agree with Labor on the MMRT and Carbon Tax. Can’t see how this matters – why blame BHP as it will affect every Aussie miner, damaage our economy, jobs and kill the mining boom – “Maybe not a Cobra strike- but more of a Python squeeze” to quote TA.

  16. Your point? says:

    Both the comments you refer too, are to do with coal. Olympic dam was exempt from all taxes, it has nothing to do with the carbon tax.

    They got everything they wanted in the 7 years of owning the mine & still couldn’t make it happen.. Why?

    Because of Fukushima & commodity prices…

    This article makes absolutely no sense, as did Tony abbots media statements about BHP billions plan to can Olympic dam expansion

    • Commodity prices? What are you talking about?
      In the past 7 years the LME copper price has risen from ~US$3400/tonne to $7660/tonne. From 2001 to 2003 it was stable around US$1350/tonne.
      World refined copper usage in the past 7 years has increased 30% to about 20Mt/y.
      Heard of peak copper? There’s a lot of copper out there but its getting more difficult to find reserves that can be profitably exploited. Discoveries peaked more than 6 years ago.
      Your point is obtuse.

    • The Loaded Dog says:

      The article makes perfect sense to those of us who happen to posses some…

      Go back to the sandpit of your ABC. It’s much more comforting there. Your ideals won’t be challenged..

    • Didn’t you bother reading my post
      or do you like being ignorant.

      It was SA’s lack of stable electricity, and then the RET that killed off the expansion.
      There are many parts to the anti-development agenda, many things that have been making Australia unviable as a manufacturing country, that those are also now starting to make it unviable even for mining.

  17. Dallas Beaufort says:

    Emmerson is a bunny caught in his own headlights, the media should know better than to foster fools.

%d bloggers like this: