BHP Billiton on Wednesday said it had approved $822 million (521 million pounds) in capital spending to dig a new iron ore mine in Australia capable of yielding 17 million tonnes of ore a year starting in mid-2012.

Development of its Orebody 24 deposit would help maintain production rates at the company's operations in Western Australia state's Pilbara iron belt, it said.

(Reporting by James Regan; Editing by Ed Davies)