BHP Billiton PLC BHP approves South Flank project (4251R)
June 14 2018 - 5:40AM
UK Regulatory
TIDMBLT
RNS Number : 4251R
BHP Billiton PLC
14 June 2018
NEWS RELEASE
Release Time IMMEDIATE
Date 14 June 2018
Release Number 07/18
BHP approves South Flank project
The BHP Board has today approved US$2.9 billion (BHP share;
US$3.4 billion 100 per cent) (1) in capital expenditure for the
South Flank project in the central Pilbara, Western Australia.
BHP President Operations, Minerals Australia, Mike Henry, said
the South Flank project will fully replace production from the 80
Mtpa (100 per cent basis) Yandi mine which is reaching the end of
its economic life.
"South Flank is a capital efficient project which offers
attractive returns, and which was approved following a thorough
evaluation under BHP's Capital Allocation Framework," Mr Henry
said. "The project will create around 2,500 construction jobs, more
than 600 ongoing operational roles and generate many opportunities
for Western Australian suppliers. It will enhance the average
quality of BHP's Western Australia Iron Ore (WAIO) production and
will allow us to benefit from price premiums for higher-quality
lump and fines products."
The South Flank project expands the existing infrastructure at
Mining Area C, and involves construction of an 80 Mtpa crushing and
screening plant, an overland conveyor system, stockyard and train
loading facilities, procurement of new mining fleet and substantial
mine development and pre-strip work.
First ore from South Flank is targeted in the 2021 calendar
year, with the project expected to produce ore for more than 25
years.
South Flank iron ore will contribute to an increase in WAIO's
average iron grade from 61 per cent to 62 per cent, and the overall
proportion of lump from 25 per cent to approximately 35 per cent.
It is expected to have a strip ratio in line with the WAIO
average.
In June 2017, BHP approved an initial funding commitment of
US$184 million (BHP share), primarily for the expansion of
accommodation facilities to support current and future workforce
requirements.
The South Flank project will be the major contributor to a
material increase in WAIO Total Marra Mamba Ore Reserves, as
outlined in Appendix 1 (2).
Further information on BHP can be found at: bhp.com
(1) BHP has an 85 per cent interest in Mining Area C and the
South Flank project, with ITOCHU Minerals and Energy of Australia
Pty Ltd and Mitsui Iron Ore Corporation Pty Ltd collectively owning
the remaining 15 per cent interest. Overall capital intensity of
US$45 per tonne of annual capacity includes initial funding of
US$216 million (US$184 million BHP share) announced on 26 June
2017. Overall South Flank project expenditure fits within Western
Australia Iron Ore's previously indicated average annual sustaining
capital expenditure of approximately US$4 per tonne over the next
five years, with actual sustaining capital expenditure highly
variable in any given year during the development of South
Flank.
(2) Appendix 1 has been submitted to the National Storage
Mechanism and will shortly be available for inspection at
www.hemscott.com/nsm.do.
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June 14, 2018 06:40 ET (10:40 GMT)
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