AusRAIL, Market Sectors

BHP’s US$ expansion

BHP Billiton and its partners will invest US $12.8bn expanding the company’s Australian iron ore and coal operations.

The lion’s share of the capital investment is for BHP’s new Jimblebar mine in the Pilbara region, Western Australia.

US$7.4bn (BHP’s share US$6.6bn) will deliver an integrated iron ore operation with capacity in excess of 220 million tonnes per annum (mtpa). First production is expected in early 2014.

“Our intent with these projects is to develop port capacity that, with subsequent debottlenecking, will allow us to fill our 240mtpa allocation in the Port Hedland inner harbour,” BHP president iron ore Ian Ashby said.

“We have intentionally overbuilt the iron ore handling facilities at Jimblebar and expect to incrementally grow mine production to ensure that our port and rail systems are operated at full capacity during this debottlenecking program.”

The investment includes:

  • US$3.4bn (BHP’s share US$3.3bn) for the development of Jimblebar mine and rail links, and the procurement of mining equipment and rolling stock that will deliver initial capacity of 35mtpa, with embedded options for expansion to 55mtpa for incremental capital investment
  • US$2.3bn (BHP’s share US$1.9bn) to further develop Port Hedland, including two additional berths and shiploaders, a car dumper, connecting conveyor routes and associated rail works and rolling stock and
  • US$1.7bn (BHP’s share US$1.4bn) for port blending facilities and rail yards to enable ore blending, the expansion of resources life and to prepare for the future growth of the business beyond the inner harbour.

The company’s partners in its Pilbara iron ore operations are Itochu minerals &amp Energy, Mitsui-Itochu Iron and Mitsui Iron Ore Corp.

Bowen Basin
BHP also announced a US$5bn (BHP’s share $2.5bn) investment to expand three metallurgical projects in the Bowen Basin region of central Queensland.

The investment includes US$2.5bn (BHP’s share US$1.25bn) for the Stage Three expansion of the BHP Billiton Mitsubishi Alliance’s wholly owned Hay Point Coal Terminal which will increase capacity from 44mtpa to 55mtpa. First shipments from the expanded terminal are expected in 2014.

US$1.6bn (BHP’s share US$800m) will also be spent on developing the new Daunia mine, where the first coal is expected to be produced in 2013, and US$900m (BHP’s share US$450m) will be invested to expand the life of the Broadmeadow mine a further 21 years and expand production capacity, with the project due for completion in 2013.

A further US$400m is to be invested in BHP’s wholly owned Hunter Valley coal operation in New South Wales.