BHP approves $US635m for iron ore

BHP Billiton has approved a further $US635 million of capital spending for two expansion projects it is proceeding with at its Pilbara iron ore operations.

The company said the investment highlights its "commitment to the Rapid Growth Project sequence of expansion projects and is consistent with the company's strategy to fully utilise its Port Hedland inner harbour capacity".

"The investment expands on BHP Billiton's earlier pre-commitment of US$1.73 billion announced in January 2010 and will facilitate the ongoing development of important port, rail and Jimblebar mine infrastructure."

The January 2010 announcement referred to early spending on Rapid Growth Project 6, which is designed to increase installed capacity in the Pilbara to 240 million tonnes per annum by calendar year 2013.

Since then, the company disclosed in its September quarter production report that RGP5 was under review.

"Scope is currently being reviewed in order to confirm car dumping and ship loading requirements," the production report said.

A company spokesman said today that of its new spending, $US340 million was for port and rail infrastructure for the RGP5 project.

The remainder was for the Jimblebar mine expansion, which is part of RGP6.

BHP's share of the $US635 million is US$570 million; the balance will be met by joint venture partners Itochu Minerals and Energy of Australia, Mitsui-Itochu Iron and Mitsui Iron Ore Corporation.

"The investment further progresses our conveyor belt of Rapid Growth Projects and ensures the company is well positioned to deliver production growth into a tight and growing market," BHP Billiton president, iron ore, Ian Ashby said today.

"Our volume maximising strategy remains unchanged as we continue to update our longer term growth plans," he said.