Australian mining company BHP Billiton has announced that it has approved US$2.9 billion in capital expenditure for the South Flank project in the central Pilbara, Western Australia. The South Flank project will fully replace production from the 80 million mt per year Yandi mine which is reaching the end of its economic life.
According to the company’s statement, the project will create around 2,500 construction jobs, more than 600 ongoing operational roles and generate many opportunities for Western Australian suppliers, while it will also enhance the average quality of BHP’s Western Australia Iron Ore (WAIO) production and will allow the company to benefit from price premiums for higher-quality lump and fines products. First ore from South Flank is targeted in 2021, with the project expected to produce ore for more than 25 years.
Meanwhile, BHP stated that South Flank iron ore will contribute to an increase in WAIO’s average iron grade from 61 percent to 62 percent.
The company has an 85 percent interest in the South Flank project, with ITOCHU Minerals, a subsidiary of Tokyo-based Itochu Corporation, and Australian energy company Energy Australia Pty Ltd and Mitsui Iron Ore Corporation Pty Ltd, Australia-based subsidiary of Japanese company Mitsui, collectively owning the remaining 15 percent interest.