BHP has shelved long-held plans for an expansion of its Olympic Dam mine in South Australia despite the Morrison government seeking to fast-track the $3.5 billion project in a bid to stimulate economic activity and jobs.

Although BHP's Olympic Dam copper, gold, silver and uranium mine recorded its best performance in five years, the company said it had decided against proceeding with a brownfield expansion project of the asset after conducting more than 400 kilometers of drilling which has improved its knowledge of the ore body.

The Olympic Dam expansion project, which BHP said would cost up to $US2.5 billion ($3.5 billion), was proposed in 2017 and was hoped to significantly increase copper production. BHP had initially anticipated reaching an investment decision on the project this year.

In June, Prime Minister Scott Morrison picked the project as one of 15 across the country to be fast-tracked under an agreement by the Commonwealth and state governments to accelerate the approval process and help support 66,000 direct and indirect jobs.