27 Jun BHP approves funding to supplement iron production in WA
BHP has approved US$184 million in initial funding to commence its South Flank sustaining mine project in the Pilbara, Western Australia.
The world’s biggest miner by volume said it hopes the project will expand the Mining Area C hub and replace the 80 million tonnes per annum produced at its Yandi mine when it reaches the end of its economic life in the early-to-mid 2020s.
The project is expected to be submitted for board approval mid-2018 with first ore targeted in FY2021 and ramp up timed to coincide with the ramp down of Yandi. The company says South Flank will also generate several thousand jobs during construction.
“As well as supporting our current operational requirements, this work will advance potential first ore from South Flank, while we further optimise the full development and progress external and internal approvals,” said BHP president operations, minerals Australia Mike Henry.
“As we have said previously, a continuing stable investment environment in Western Australia is required to underpin ongoing investment in the business, including this project.”
The capital cost for South Flank is expected to be in the range of $30 to $40 per tonne, with expenditure fitting within the company’s Western Australia iron ore division’s previously indicated average sustaining capital expenditure of $4 per tonne over the next five years according to BHP.
“The capital efficiency of South Flank is underpinned by the planned use of existing infrastructure at the Mining Area C operation, which would, if approved, become one of the largest standalone iron ore processing centres in the world, within reach of several billion tonnes of high-grade ore,” Henry added.