Mining giant listed Australia’s top company on back of SA resources
A mining giant hits number one spot on the Australian Stock Exchange as SA’s largest company Santos makes a call on a $400 million gas project.
The world’s largest mining company and the main player in South Australian copper mining has leapfrogged Commonwealth Bank to become the top company on the Australian Stock Exchange. It has hit record highs in its share price amid global resource demand.
Shares in BHP – an employer of some 8000 South Australians – rallied yesterday to close at $58 per share on Tuesday afternoon, giving the company a market capitalisation of about $305 billion.
Meanwhile, shares in Commonwealth Bank fell yesterday, sinking to $174 per share and a market capitalisation of approximately $287 billion. The blue chip stock continued to sink in early trade this morning and is currently trading down by 1.87 per cent.
It’s not the first time BHP has topped the stock exchange but it comes on the back of record earnings and escalating success in the South Australian outback, where its copper business is booming amid growing demand for the mineral.
A record was broken at South Australia’s Olympic Dam mine in the third quarter of the financial year, with mine owner BHP reporting its largest amount of material mined, ore milled and concentrate smelted over the period.
And it achieved record gold production at the far north site near Roxby Downs, the centrepiece of the company’s global copper business, which is the largest in the world.
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In the third quarter, 82.8kt of copper was produced at the company’s South Australian mines, where it digs up copper, gold and other minerals. BHP is the largest producer of copper globally and currently employs around 8,000 South Australians.
Last year, BHP announced it was spending hundreds of millions of dollars on its Olympic Dam mine, creating new jobs and boosting production at the state’s massive copper precinct.
Santos makes big call on future of PNG pipeline project
Meanwhile, South Australia’s top company Santos will fund part of a new $400 million pipeline connecting one of its gas production facilities to a larger pipeline in Papua New Guinea, the company announced today to shareholders.
Santos said it had made its final investment decision to proceed with the Agogo Production Facility (APF) Tie-In Project in PNG after joint venture partners approved the project.
It involves building a 19 kilometre pipeline that connects to the existing PNG LNG gas pipeline – a 700-kilometre-long pipeline that transports gas from the PNG highlands to an LNG plant just outside of Port Moresby.
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Santos and joint venture partners ExxonMobil, ENEOS Xplora, Kumul Petroleum and the Mineral Resources Development Company will fund the new pipeline.
The companies will also construct two new wells and associated production facility modifications as part of the $400 million project, of which Santos will cover $160 million.
Santos CEO and managing director Kevin Gallagher said the newly approved project was a “high-quality development with strong economics and a clear role in our strategy to build and grow portfolio production”.
“The project is expected to be strongly value accretive, support our long-term production profile and sustain feed gas supply to PNG LNG,” Gallagher said.
Key regulatory approvals for the new pipeline are in place, while required land access has been secured, Santos PNG chief operating officer Brett Darley said.
Santos is also currently assessing whether it will move ahead with a $16 billion project in PNG, which would see the Elk and Antelope gas fields in the Gulf of Papua developed, as well as a 320km pipeline constructed.
It would connect to a new LNG plant north of Port Moresby and would process up to 5.6 million tonnes of gas each year. Santos holds a 22.8 per cent interest in the Papua LNG project.
The Santos board heard calls from concerned PNG locals at the company’s annual general meeting in Adelaide last month, one claiming “we haven’t been consulted”.
Customary landowner Meg Keako from PNG’s remote Kikori District told the board that Santos partners were “working on our land without consulting or even so as talking to everyone”.
“The pipeline from this project runs directly through my village, yet we haven’t been consulted,” Keako claimed.
“We have a right to be able to understand what is happening on our land and to be informed and properly consulted.”
In response, Santos chair Keith Spence said the PNG government would facilitate a development forum with landowners where risks and issues would be discussed and resolved.
“A development forum needs to occur, and it’s planned to occur,” Spence said.
Santos shares are up by 0.86 per cent in early trade.
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