BHP Board Approves $2.9 Bln In Capital Expenditure For South Flank Project

Marco Green
June 16, 2018

The new South Flank project in the central Pilbara will increase BHP's average iron grade from 61% to 62% and eventually replace production from its Yandi mine, which is reaching the end of its life. The project will increase the average quality of BHPB ores and benefit from quality premiums, BHPB says.

"The project will create around 2,500 construction jobs, more than 600 ongoing operational roles and generate many opportunities for Western Australian suppliers", Mr Henry said in a statement.

"The South Flank development works will help to ensure that the Mining Area C precinct becomes one of the largest standalone iron ore processing centres in the world, and it is our privilege to again be working with BHP to deliver high-quality assets of long-term value".

Production is expected to start in 2021 and run for more than 25 years.

Revenue to CPB Contractors for this construct-only contract is approximately $260 million, with construction scheduled to commence in July and conclude in September 2020.

In June 2017, BHP approved an initial funding commitment of US$184 million (BHP share), primarily for the expansion of accommodation facilities to support current and future workforce requirements.

WA's big iron ore miners are gearing up to spend $25.5 billion to extend the life of their Pilbara iron ore operations, according to investment bank UBS, with the mini-iron ore boom promising jobs, growth and a new wave of construction work.

The mine would allow Fortescue, which usually produces lower-grade iron ore, to "underpin the introduction of a (higher-grade) 60% product in the second-half of financial year 2019", the Perth-based miner said.

Fortescue Metals Group last month announced plans to develop a new $A1.7 billion Pilbara mine called Eliwana, while Rio Tinto past year green-lit a feasibility study into its new Koodaideri iron ore project in the region.

The Japanese corporations will also contribute, bringing the total cost of the project to $A4.55 billion ($US3.4 billion). "We're pretty well positioned, given the timing of our full sanction", he said.

Other reports by Click Lancashire

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