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BHP approves South Flank development

Iron ore project will replace the receding 80Mtpa Yandi

Staff reporter

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Owners of the remaining 15% stake, Itochu Minerals and Energy of Australia and Mitsui Iron Ore Corporation, will supply the balance of the overall $3.4 billion capital spend.  

Work on the South Flank project will include the expansion of the existing infrastructure, the construction of an 80 million tonnes per annum crushing and screening plant, an overland conveyor system, stockyard and train-loading facilities, the procurement of new mining fleet and the development of the mine, as well as pre-strip work.

First ore from South Flank is targeted for 2021, with the project expected to have a mine life of more than 25 years.

The project is meant to fully replace BHP's 80Mtpa Yandi mine in the same region, which accounts for about one-third of BHP's WA iron ore (WAIO) production and is reaching the end of its mine life.

BHP believes South Flank's product will help increase its WAIO division's average iron grade to 62% from 61% and the overall proportion of lump to around 35% from 25%.

BHP president of operations, minerals Australia Mike Henry said South Flank was a capital efficient project offering attractive returns.

"The project will create around 2,500 construction jobs, more than 600 ongoing operational roles and generate many opportunities … It will enhance the average quality of BHP's Western Australia iron ore production and will allow us to benefit from price premiums for higher-quality lump and fines products," he said.

BHP previously approved an initial funding commitment of $184 million in June last year for early works, including the expansion of accommodation facilities.

BHP's shares were 0.29% down in London trade Thursday afternoon at £17.44 (US$23.25).

 

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