Australian newspaper reported that BHP Billiton will move to open-cut operations at its Olympic Dam mine in a AUD 7 billion (USD 4.8 billion) expansion.

The newspaper citing an interview with Mr Premier Mike Rann said that the company decided against the South Australian state government’s preferred option of smelting metals at the site.

According to the report, falling demand for Australian minerals led to speculation BHP Billiton may scale back expansion and simply enlarge the mine’s existing underground operations.

BHP is completing an environmental impact statement on Olympic Dam with a presentation to the board scheduled for late 2009, the Australian reported. The mine, located 560 kilometers north of Adelaide, is Australia’s largest underground operation and contains the world’s fourth-biggest copper deposit and the largest known reserve of uranium ore.