BHP Billiton Expands High Quality Iron Ore and Coke Coal Mining in Australia

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Expansion programs with a total outlay of just under $150 million will be undertaken at BHP Billiton's (ASX, NYSE, LSE: BHP) (Melbourne, Australia) Australian iron ore and coal mines in the next two years.

A system capacity of 100 million tons per annum (MTPA) will be ensured in mid 2004 by the accelerated development of the company's Western Australian iron ore expansion projects. A low cost, low risk means of maximizing returns from the current strong iron ore market conditions would be provided by the expansion of Area C (PEC 86000468) and the Products and Capacity Expansion (PACE), said Bob Kirby president of Carbon Steel Materials.

Area C is the largest undeveloped Marra Mamba ore resource in the Pilbara and is 37 kilometers from the existing Yandi mine. First production is scheduled for, loading in September with the official opening in October. Customer feedback from trials of bulk sample product has been positive, with strong interest also expressed from China.

"The accelerated expansion will also provide system capacity to ensure we can meet the ongoing growth in demand for both the new Marra Mamba ores and the existing Brockman and Yandi ores in the Asia region, particularly China," he said.

Capacity on the rail line from Newman to Port Hedland will be expanded to 100 MTPA by mid 2004 with the addition of three extra sidings and 240 new ore cars thus aligning all three elements of the system.

Capacity of Area C was to be incrementally expanded to 15 MTPA by 2011 in the original program announced in April 2002. This capacity will now be available by the first quarter of 2004. The original schedule for PACE, providing the foundations for expansion to 100 MTPA by 2011 will become available at the same time without additional expenditure being incurred.

Total expenditure for the additional sidings and ore cars, the increases ore processing capability at Area C, and accelerated pre-stripping at Mt Whaleback will be around $50 million with BHP contributing $42.5 of that amount.

BHP Billiton has also approved the installation of a five kilometer overland conveyor and additional ore handling facilities thus raising the Yandi mine's capacity by three million tons to 42 MTPA in early 2004 and improving operating efficiencies. BHP will contribute $23 million of the $27 million for this high value brownfields expansion.

"These acceleration initiatives support key elements of BHP Billiton's iron ore growth strategy including the introduction of new high 'value-in-use' products, such as MASC(TM) to meet the needs of high technology customers. We are also undertaking feasibility studies for further expansions of the Western Australian iron ore business, should the market warrant, to 120 Mtpa. This will ensure that we are well placed to maintain our position as one of the world's leading suppliers of iron ore and will include a wide range of high quality hematite, pisolite and Marra Mamba ores," Kirby said.

Area C is the largest undeveloped Marra Mamba resource in the Pilbara and is 37 kilometers from the existing Yandi mine. First production is scheduled for, loading in September with the official opening in October. Customer feedback from trials of bulk sample product has been positive, with strong interest also expressed from China.

In Central Queensland, the BHP Billiton Mitsubishi (TOKYO:7011) (Tokyo, Japan) Alliance (BMA) has announced plans to develop a new punch longwall underground coal mine. The $67 million Broadmeadow Mine (PEC 86000537) will have the capacity to produce up to 3.6 million tons of high quality coking coal per annum.

The mine will be BMA's first application of punch longwall mining which is a highly efficient underground technique utilizing an existing open cut pit for longwall panel access. Broadmeadow is located on BMA's Goonyella open cut mine lease. BMA's competitiveness will be enhanced by this simple, low cost mining option. Development of the mine will start in the third quarter 2003 and longwall operations will commence in the second half of 2005.

The mine is part of BMA's strategy to respond rapidly to market opportunities with flexible low cost production of high quality coking coal. Goonyella brand coking coal is highly regarded and widely utilized in steel production globally.

BMA is jointly owned by BHP Billiton and Mitsubishi and operates seven coalmines and the Hay Point Coal Terminal in Central Queensland. The mines have the capacity to produce more than 50 million tons of coal a year, which is exported to more than 60 customers in 20 countries.