BHP Increases Olympic Dam Resource Estimate by 7.8%

By Rebecca Keenan and Jesse Riseborough

Sept. 24 (Bloomberg) -- BHP Billiton Ltd., the world's largest mining company, increased the estimated ore resource at its Olympic Dam project in Australia by 7.8 percent as it studies an expansion that may cost at least $6 billion.

Total estimated ore resources increased to 8.3 billion dry metric tons at June 30, Melbourne-based BHP said today in its annual report. That compares with last year's estimate of 7.7 billion metric tons for the world's biggest uranium deposit and fourth-largest copper lode.

BHP plans to complete an initial study on the expansion by the end of the year. The forecast development cost of Olympic Dam may rise threefold to as much as $15 billion, according to estimates last year by Merrill Lynch & Co. and JPMorgan Chase & Co. BHP boosted its reserve estimate 19 percent last week.

``We are currently exploring a series of staged development options that would make our wholly-owned Olympic Dam operation one of the world's largest producers of copper, the largest producer of uranium, and a significant producer of gold,'' BHP said in the report today. ``Ultimately, the expansion project will depend upon board approval of the final investment case and a range of regulatory and governmental approvals and agreements.''

BHP fell 0.7 percent to A$37.64 at 10:37 a.m. Sydney time on the Australian stock exchange.

A resource estimate is a broad calculation of minerals contained underground while a reserve estimate is a measure of minerals that can be profitably mined.

To contact the reporters on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.netJesse Riseborough in Melbourne at jriseborough@bloomberg.net;