SYDNEY?: The world's biggest miner BHP Billiton on Friday announced plans to pour billions of dollars into expanding its coal and iron ore operations in Australia.
The cashed-up resource giant said US$7.4 billion will be pumped into continuing production growth in the company's Western Australia iron ore operations to expand capacity to more than 220 million tonnes a year.
Of that, US$3.4 billion will be used to develop its Jimblebar mine and rail links, and to buy mining equipment and rolling stock.
Another US$2.3 billion is earmarked for improvements to Port Hedland, including additional berths and shiploaders, a car dumper, rail works and rolling stock.
The rest of the investment will be used to improve port blending facilities and rail yards.
BHP will contribute US$6.6 billion to the projects and its partners the rest.
The Melbourne-based Anglo-Australian miner also announced a US$5 billion cash injection into three key metallurgical coal projects in Queensland's Bowen Basin, with BHP's share US$2.5 billion.
This will add 4.9 million tonnes of annual mine capacity through development to the company's Daunia operation and a new mine in Broadmeadow.
Port capacity at the Hay Point Coal Terminal will also be increased.
Another US$400 million will be used to expand a thermal coal mine in the New South Wales Hunter Valley, the company said in a statement.
BHP iron ore president Ian Ashby said the intention was to develop the port capacity so that the company could fill its 240 million tonnes per annum allocation in Port Hedland's inner harbour.
"We have intentionally overbuilt the ore handling facilities at Jimblebar and expect to incrementally grow mine production to ensure that our port and rail systems are operated at full capacity during this debottlenecking programme," he said.
First production from the Jimblebar mine was expected in early 2014.
BHP Billiton metallurgical coal president Hubie van Dalsen said the company had a deep pipeline of expansion projects to develop its large reserves of metallurgical coal.
"Our strategy is to rapidly progress development of these projects to capture the increasing demand we see for hard coking coal," he said.
BHP is in the money after reporting a 72 percent surge in half-year net profits to US$10.52 billion for the six months to December 31, as emerging markets snap up raw materials and the West edges out of its economic slump.
BHP, which was recently foiled in takeover plans for Canadian fertiliser giant Potash Corp. and an iron ore merger with arch-rival Rio Tinto, said last month it also plans to buy back US$10 billion in its shares this year.
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