BHP Billiton and Japanese Traders Decide 5th Expansion of West Australian Iron Ore

BHP Billiton, Itochu Corporation and Mitsui & Co., announced on 25 November that they implement the 5th stage expansion of the iron ore project in West Australia. They will expand the iron ore shipment capacity by 76 million tonnes to 205 million tonnes per annum by the second half of 2011 from the present with capex at total US$ 5.6 billion (approximately 532 billion yen) including already decided investment. Iron ore demand is recently weakening when world steel makers are decreasing their outputs along economy slowdown. However, BHP Billiton and Japanese trading houses agreed in the next stage expansion with an expectation that iron ore demand could keep steady growth from emerging countries including China in mid and long term.

The project’s current shipment capacity is 129 million tonnes per annum. The project is now under construction of the 4th stage expansion which aims 155 million tonnes by 2010. The 5th stage expansion will be implemented together with the 4th stage expansion.

The 4th stage expansion is based on the output increase of Mt. Newman. The 5th stage expansion contains facility reinforcement at Port Hedland and Mining Area C, construction of another transporting railway, and introduction of additional ore treating facilities at Yandi mine.

The iron ore project is operated by a joint venture controlled by BHP Billiton with 85% equity, Itochu Corp with 8% equity and Mitsui with 7% equity.