Australian mining company BHP Billiton has announced the approval of the "Rapid Growth Project 5" (RGP5) with a total capital investment of US$4.8 billion, including previously approved capital of US$930 million.
According to BHP Billiton, RGP5 will increase installed capacity across its Western Australia Iron Ore operations by 50 million mt to 205 million mt per annum and is expected to deliver first production in H2 of 2011.
While the majority of production growth will come from the Yandi and Mining Area C operations, RGP5 will see significant infrastructure upgrades including additional shipping berths at the Port Hedland inner harbor, substantial double tracking of the company's rail system, and additional crushing, screening and stockpiling facilities at Yandi.
Commenting on the investment project, BHP Billiton Chief Executive of Ferrous and Coal, Marcus Randolph, said, "While there is substantial uncertainty in the short-term outlook, this investment decision highlights BHP Billiton's confidence that the long-term outlook remains positive. The expansion also underscores our belief that high-quality West Australian iron ore with close proximity to China and the Asian markets is an important source of supply. With our strong balance sheet, we are well positioned to invest in high-quality and low-risk projects such as RGP5."
BHP Billiton's partners in the Western Australia Iron Ore operations are Itochu Minerals & Energy of Australia Pty Ltd, Mitsui-Itochu Iron Pty Ltd and Mitsui Iron Ore Corporation Pty Ltd, whereas BHP Billiton's attributable share is approximately 85 percent.
The announcement regarding capacity expansion follows BHP Billiton's recent notification of its abandonment of plans to merge with rival miner Rio Tinto.