The South Australian government has initiated the application and assessment process for BHP's (NYSE:BHP) proposed expansion of its Olympic Dam copper smelter and refinery.

If approved, this project would significantly boost BHP's copper production capabilities by introducing a second copper smelting furnace to complement and expand the existing facilities.

BHP, the world's largest mining company, views this expansion as a milestone in its strategy to enhance copper output in this region.

"We are already growing BHP's copper production in South Australia with projects and studies underway at all of our operating sites, and we're moving at pace to potentially double our current production by the middle of the next decade," said Anna Wiley, BHP's Asset President for Copper in South Australia.

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Expansion plans include the construction of a second copper smelting furnace at Olympic Dam. The miner aims to increase production to 500,000 tons per year of refined copper cathode by the early 2030s, potentially boosting output to 650,000 tons per year by the mid-2030s.

This target represents a significant increase from the approximately 322,000 tons produced in the last financial year.

The company's copper operations in South Australia include Prominent Hill and Carrapateena underground mines. These sites supply copper concentrate to the Olympic Dam smelter and refinery complex.

Additionally, BHP is progressing its exploration at the Oak Dam prospect, where it recently announced an inferred mineral resource of 1.34 billion tons at a copper grade of 0.66% and a gold grade of 0.33 grams per ton.

This includes a higher-grade area containing 220 million tons of 1.96% copper and 0.68 grams per ton of gold.

The expansion of copper production aligns with BHP's broader economic and commodity strategy. Copper is increasingly seen as a pivotal resource in the global energy transition, essential for electric vehicles, renewable energy infrastructure, and various electronic applications.

Despite anticipated short-term surplus, the company sees copper pricing moving into a phase of durable outperformance, as stated in a recently published commodity outlook.

The final investment decision on the first phase of the smelter and refinery expansion is anticipated in the first half of the 2027 financial year.

Price Action: BHP shares are trading lower by 0.11% to $55.07 premarket at the last check on Friday.

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