PERTH (miningweekly.com) – Mining major BHP Billiton is on track to exceed its 2016 financial year copper production target of 200 000 t at the Olympic Dam mine, in South Australia.

Asset president Jacqui McGill told the American Chamber of Commerce on Friday that copper production during the December quarter had increased by 37%, compared with the previous corresponding period, to a record 112 000 t.

“The grade of our copper ore has also increased by 35% in the December 2015 quarter, which is in line with the mine plan.

“Again, this is an important point to note; we are now regularly delivering production that meets our plans, which has not happened consistently for some time.”

McGill noted that the changes at the Olympic Dam operations were necessary, given the position the mine was in only a year ago.

“The mood was sombre, and the site wasn’t operating at full capacity due to a failure of our Svedala mill, which is an important part of our production process. Our teams were disengaged, we weren’t profitable and we had a bleak outlook.

“We needed to act to secure the future of Olympic Dam, and that meant drastic action.”

The “drastic action” included changes to the underground mine, which reduced risk to miners, and a restructure in the organisational structure in the mine, which led to 550 redundancies.

During this time, the mine operated at full capacity, which McGill said enabled BHP to build inventory, while the miner also took the opportunity to do significant maintenance on the surface plant.

McGill noted that with all of these changes implemented, and copper production forecasts seemingly sunny, BHP was also continuing to target a position in the first segment of the cost curve.

“This is incredibly important as we operate in a global market and must be competitive on that basis, not simply within Australia. We’ll push towards this through low-risk, capital-efficient underground expansions, including accessing the Southern mine area.”

McGill said that over the next five years, BHP would construct about 120 km of new tunnels at Olympic Dam, while working to reset its cost base through higher volumes and greater efficiencies - reducing unit cash costs by 34% in 2016 and by 48% in 2017, taking unit costs to $1/lb.