BHP Billiton to invest $10b in Australia
The Melbourne-based Anglo-Australian giant will spend $6.6 billion on expanding its iron ore operations in Western Australia state, $2.5 billion on expanding three metallurgical coal projects in Queensland state and $400 million on an energy coal project in New South Wales state, it said in statements to the Australian Securities Exchange.
BHP Billiton said the company and its partners would spend $7.4 billion on developing the Jimblebar iron ore mine and improving rail and port facilities in the Pilbara region of Western Australia. The mine will start producing in 2014 and lift the company’s iron ore production in the region to more than 246 million tons (220 million metric tons) a year.
The company also approved spending $2.5 billion on three coking coal projects in the Bowen Basin in central Queensland that will add 5.5 million tons (4.9 million metric tons) of annual production capacity.
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 Billiton said it would spend $400 million to expand the Hunter Valley Energy Coal mine in New South Wales to increase coal production by 4.5 million tons (4 million metric tons) to about 27 million tons (24 million metric tons) a year.
“The emergence of demand for coal in the key growth markets allows us to get product to market quickly, ahead of further coal preparation plant expansions,” BHP Billiton energy coal president Jimmy Wilson said.
BHP Billiton has plenty of cash to spend, having reported a first-half net profit in February of $10.5 billion for the six months to Dec. 31.