BHP Billiton will provide $1.2bn to develop an open pit mine, as part of the first phase of the Olympic Dam project in South Australia.

The company will use the funds to procure long lead items such as trucks and accommodation, as well as for infrastructure development and early site works.

The project is currently in the feasibility stage and will progress into execution once it completes all required studies and receives board approval.

The pre-commitment capital is conditional on the successful passage of the indenture agreement through the South Australian parliament.

BHP Billiton CEO Marius Kloppers said that the project team is completing studies to create one of the world’s largest open pit mines with the potential to increase copper production from around 180,000t to 750,000tpa and beyond.