Appr Mining Area C Expansion
BHP Billiton Limited
3 April 2002
BHP Billiton Limited is issuing this announcement to fulfil disclosure
obligations arising from its secondary listing on the London Stock Exchange.
The text of this release is identical to that issued by BHP Billiton Plc
earlier.
3 April 2002
Number 19/02
BHP BILLITON APPROVES MINING AREA C DEVELOPMENT AND
PORT HEDLAND CAPACITY EXPANSION
BHP Billiton today announced approval for the development of a new iron ore mine
at Mining Area C and an expansion of its Pt Hedland port and rail facilities,
both in the Pilbara region of north Western Australia.
Capital costs for the two projects are expected to be US$213 million for
development of the new mine (BHP Billiton share US$181 million) and US$351
million for the Port and Capacity Expansion (BHP Billiton share US$299 million).
The Mining Area C development has the potential to increase iron ore production
by up to 15 million tonnes per annum (mtpa) by 2011. The Port and Capacity
Expansion (PACE) will increase BHP Billiton's export capacity from 67mtpa to
81mtpa by 2004 and provide the foundations for expansion to over 90mtpa by 2011,
an increase of more than 40 per cent.
As part of the Mining Area C development, BHP Billiton has entered into a joint
venture with POSCO, whereby POSCO will acquire a 20 per cent interest in the 'C
Deposit' section of Mining Area C.
Under the agreement POSCO has committed to purchase a minimum of three million
tonnes per annum of MACO ore following initial ramp-up and to maintain a
long-term strategic alliance with BHP Billiton for supply of other iron ore
products.
BHP Billiton Deputy CEO Brian Gilbertson said: 'The development of Mining Area C
signals a new era of growth in our Western Australian iron ore operations and
further consolidates our strong relationship with a core customer and one of the
most efficient and innovative steel makers in the world.
'For BHP Billiton and its Goldsworthy JV partners this is the first step in
unlocking the significant Marra Mamba resource in Mining Area C, which will
target the growing requirements for high 'Value in Use' ore from Asia's direct
blast furnace steelmakers.
'In addition, the development of Mining Area C marks our determination to
maintain BHP Billiton's share of the global seaborne market for iron ore.'
All necessary approvals and agreements are in place for construction of the new
mine to commence immediately, with full-scale mining of the 'C Deposit'
sub-lease to begin in 2003. Development of the PACE project will commence later
this calendar year subject to final regulatory approvals.
'The staged expansion of the port facilities over the next decade will provide
system capacity to ensure we can meet the predicted growth in demand for both
the new Marra Mamba ores and our existing Brockman and Yandi ores in the Asian
region,' Mr Gilbertson said.
Mining Area C is located 37 kilometres from BHP Billiton's existing Yandi mine
and contains the largest undeveloped Marra Mamba resource in the Pilbara.
The resource is currently estimated at 890 million tonnes with significant
further exploration potential. 'C Deposit' is located on the northern flank of
Mining Area C and contains a proven reserve of 161 million tonnes and a probable
reserve of 29 million tonnes (total 189 million tonnes rounded).
The new Mining Area C development will include:
• The development of a 15mtpa mine and processing facility to produce
Marra Mamba lump and fines;
• Construction of a 38km railway spur, linking Mining Area C operations
to Yandi;
• Installation of infrastructure including power, water, airstrip and
access roads, and
• Accommodation facilities for a 500-strong construction workforce and a
permanent operations workforce of 150.
Expansion of the port facilities will include:
• Developing a new Western Stockyard;
• A major upgrade and enhancement of dust suppression systems;
• Upgrading the under harbour tunnel conveyor from 4,500 tph to 10,000
tph;
• Establishing an additional lump re-screening facility, and
• Extension of existing shipping berths.
The first phase of the port expansion will increase capacity from 67mtpa to
81mtpa by 2004 and will require a workforce of approximately 400. About 20 new
permanent positions will be created by the port expansion.
Capital expenditure for PACE includes the installation of more modern and
efficient dust suppression systems at the port facility, expected to cost about
US$33 million (BHP Billiton share US$28 million).
Under the POSMAC joint venture arrangement, ownership of the 'C Deposit'
development will be BHP Billiton 65 per cent, POSCO 20 per cent, CI Minerals
Australia Pty Ltd 8 per cent and Mitsui Iron Ore Corporation 7 per cent.
ORE RESERVE STATEMENT
The information in this report that relates to Mineral Resources and Ore
Reserves is based on information compiled by M. Kneeshaw (resources) and P.
Schultz (reserves) who are employees of BHP Billiton and who are a Fellow and
Member respectively of The Australasian Institute of Mining and Metallurgy.
M Kneeshaw and P Shultz have sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as a Competent Person as defined
in the 1999 Edition of the 'Australasian Code for Reporting of Mineral Resources
and Ore Reserves'. M Kneeshaw and P Shultz consent to the inclusion in the
report of the matters based on their information in the form and context in
which it appears.
Further information can be found on our Internet site: http://
www.bhpbilliton.com
Australia
Dr. Robert Porter, Investor Relations United Kingdom/South Africa
Tel: + 61 3 9609 3540 Mobile: +61 419 587 456 Michael Campbell, Investor & Media Relations
email: Robert.Porter@bhpbilliton.com Tel: +27 11 376 3360 Mobile: +27 82 458 2587
email: Michael.J.Campbell@bhpbilliton.com
Michael Buzzard, Media Relations
Tel: +61 3 9609 3709 Mobile: +61 417 914 103 Ariane Gentil, Manager Communications
email: Michael.Buzzard@bhpbilliton.com Tel: +44 20 7747 3977 Mobile: + 44 7881 518 715
email: Ariane.Gentil@bhpbilliton.com
United States
Francis McAllister, Investor Relations
Tel: +1 713 961 8625 Mobile: +1 713 480 3699
email: Francis.R.McAllister@bhpbilliton.com
BHP Billiton Limited ABN 49 004 028 077 BHP Billiton Plc Registration number 3196209
Registered in Australia Registered in England and Wales
Registered Office: 600 Bourke Street Melbourne Victoria Registered Office: 1-3 Strand London WC2N 5HA United Kingdom
3000 Telephone +44 20 7747 3800 Facsimile +44 20 7747 3900
Telephone +61 3 9609 3333 Facsimile +61 3 9609 3015
The BHP Billiton Group is headquartered in Australia
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