18/08/2008 - 15:34

BHP flags further $6bn iron ore upgrade

18/08/2008 - 15:34

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BHP Billiton Ltd is close to sanctioning another stage of its Pilbara iron ore expansion but chief executive Marius Kloppers kept quiet on plans to build an outer habour in Port Hedland.

BHP flags further $6bn iron ore upgrade

BHP Billiton Ltd is close to sanctioning another stage of its Pilbara iron ore expansion but chief executive Marius Kloppers kept quiet on plans to build an outer habour in Port Hedland.

In a conference call to reporters this afternoon, Mr Kloppers said approval for Rapid Growth Project 5 is imminent, with the company already approving over $1 billion in pre-commitments to order long lead items.

Mr Kloppers added that once approval is given, billions of dollars more would be spent on the project which would increase BHP's iron ore production rate to 200 million tonnes per annum.

"The money will go towards dredging berth pockets, inner habours, duplicating some rail way lines," Mr Klopper said.

In its presentation, BHP has estimated its share of capital expenditure for RPG5 will be $6.1 billion with first production scheduled for the second half period of 2011.

While expansion plans on land are all the go - BHP will complete the $1.8 billion RPG4 plan in 2010 - Mr Kloppers said he was not able to provide any details on the development of an outer habour, known as the Qantum project.

Mr Kloppers said the project was still in prefeasibility study mode.

The development of the outer habour is seen as a necessity for BHP's iron ore expansion plans, as emerging iron ore miners in the Pilbara vie for port space to export the commodity.

 

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