BHP Billiton Ltd. (NYSE: BHP), one of the world's largest mining companies, said it would invest about $10 billion in Australia to expand its iron ore coal mining operations.
BHP will shell $6.6 billion to continue production growth in the company's Western Australia Iron Ore operations. It will deliver an integrated operation with capacity in excess of 220 million tonnes per annum (mtpa), with first production expected from the new Jimblebar mine in early calendar year 2014.
The investment includes $3.3 billion for the development of Jimblebar mine and rail links, and the procurement of mining equipment and rolling stock that will deliver initial capacity of 35 mtpa, with embedded options for expansion to 55 mtpa for incremental capital investment;
BHP Billiton will spend $1.9 billion to further develop Port Hedland and $1.4 billion for port blending facilities and rail yards to enable ore blending, the expansion of resource life and to prepare for the future growth of the business beyond the inner harbour.
Our intent with these projects is to develop port capacity that, with subsequent debottlenecking, will allow us to fill our 240 mtpa allocation in the Port Hedland inner harbour. We have intentionally overbuilt the 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, BHP Billiton President Iron Ore, Ian Ashby said in a statement.
In a separate release, BHP Billiton said it would invest $2.5 billion three key metallurgical coal projects located in the Bowen Basin in Central Queensland, Australia. The projects will add 4.9 million tonnes of annual mine capacity through development of the Daunia operation and a new mining area at Broadmeadow.
In addition, 11 million tonnes of annual port capacity (100% basis) will be developed at the Hay Point Coal Terminal.
BHP Billiton Metallurgical Coal President, Hubie van Dalsen said, The company has a deep pipeline of expansion projects to further develop its large reserves of high quality metallurgical coal.
Our strategy is to rapidly progress development of these projects to capture the increasing demand we see for hard coking coal.
Subject to further approvals, this initial investment will be followed in the near term by the construction of the Caval Ridge mine, which will utilize expanded Hay Point port capacity created from this investment.
The Daunia mine project, the Hay Point Coal Terminal and the Broadmeadow mine are operations of the BHP Billiton Mitsubishi Alliance, a 50:50 joint venture between BHP Billiton and Mitsubishi Development Pty Ltd.
Separately, BHP Billiton announced approval of a $400 million investment to expand Hunter Valley Energy Coal in New South Wales, Australia.
The expansion, known as the RX1 Project (RX1), will enable Mt Arthur Coal's run-of-mine thermal coal production to increase by 4 million tonnes per annum (mtpa), to approximately 24 mtpa. RX1 is substantially a mine only expansion without an associated increase in coal preparation plant capacity.
RX1 is expected to deliver first production in the second half of the 2013 calendar year. In addition to the employment generated by the project during construction, the RX1 expansion is expected to generate approximately 300 new, full time jobs.