BHP Billiton To Expand Iron Ore Capacity

Will spend $1.85 billion in bid to meet demand from China.

Resources company BHP Billiton March 23 said it will invest $1.85 billion to expand capacity at its western Australian iron ore operations amid increasing demand from China. The investment will allow the company, the world's largest diversified miner, to increase production to 155 million tons per annum from 2010.

The group has already completed two earlier expansion projects which have brought production capacity to 109 million tons a year. A third expansion project now underway, designed to take output to 129 million tons, is scheduled to be completed by the end of this year.

Head of iron ore at BHP Billiton, Ian Ashby, said the latest plan would deliver large-scale benefits to the company, its customers and shareholders and the local communities in the Pilbara mining region. The project would "further increase the efficiency of our integrated mine, port and rail operations and represents a key investment in our ongoing strategy to be more responsive to customer needs," he said.

BHP Billiton's partners in the Pilbara venture, Mitsui and Co and Itochu Corp, will contribute to the costs which are expected at about $2.2 billion.

By the end of 2007, BHP Billiton will have increased iron ore capacity by 60 million tons per annum over four years, amid growing demand from China for steel making products. Ashby said the company was also looking at other options to expand capacity.

Rival miner Rio Tinto has also committed itself to increasing capacity to satisfy strong demand from Asia. The group recently approved an $860 million expansion to the Cape Lambert port in northern Australia to expand export capacity from 55 to 80 million tons a year.

Copyright Agence France-Presse, 2007

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