Mt. Arthur North Development
BHP Limited
5 July 2001
Date: Thursday, 5 July 2001
Number: 03/01
MOUNT ARTHUR NORTH DEVELOPMENT TO PROCEED
BHP Billiton Limited (BHP Billiton) today announced it has approved the
commencement of construction of the Mount Arthur North open cut thermal coal
mine in the Upper Hunter Valley, New South Wales.
The project represents a high value brownfield expansion of the existing BHP
Billiton Bayswater mine.
It forms a key component of BHP Billiton's thermal coal strategy, designed to
expand production from high margin Australian resources to meet growing
regional demand for steaming coal.
In turn, the development contributes to the Company's intention to have
multi-sourcing options, in addition to its South African, Colombian and
Indonesian production, for the supply of coal into regional markets.
The estimated capital cost of the Mount Arthur North development is US$411
million. The mine will be capable of producing up to 15 million tonnes of raw
coal per annum.
Production of 6.3 million tonnes of saleable coal, from the Bayswater/Mt
Arthur North complex, is expected to be achieved in financial year 2003. Full
production from Mount Arthur North of 12.1 million tonnes per annum of
saleable coal is expected by 2006.
A portion of the initial production will be supplied under contract for five
years to Macquarie Generation for local power station electricity generation,
delivered by an existing overland conveyor.
President of BHP Billiton Thermal Coal, Mr Mike Oppenheimer, said:
'The Mount Arthur North development forms an important part of BHP Billiton's
ongoing focus to manage a high quality, diverse asset base with an underlying
strategic commitment to accelerate the movement towards greater customer
service and extended value chain participation.'
'The development of this world class resource enhances BHP Billiton's position
to capture an increased share of the assessed strong growth in Asian energy
demand in general, and seaborne traded thermal coal demand in particular.'
Production costs at Mount Arthur North are expected to be sustainable in the
lowest quartile. The development displays robust project economics and
represents an important increment in the value of BHP Billiton's portfolio of
thermal coal assets.
The Mount Arthur North coal resource is the last remaining significant open
cut resource in the Hunter Valley to receive development consent. Mount Arthur
North contains estimated coal resources of 812 million tonnes (721 million
tonnes measured and 91 million tonnes indicated).
The mine development is adjacent to Bayswater Colliery and the two resources
will be mined as one large, flexible operation. Synergies will be captured
through combined management, combined mine planning, sharing of
infrastructure, sharing of equipment and joint marketing. Full capacity of the
combined operations is expected to be up to 14.5 million tonnes of saleable
coal per annum. The stripping ratio for the Mount Arthur North development is
approximately 4:1 and is expected to be constant over the mine life.
The Bayswater Mine and Mt Arthur North development are owned by the BHP
Billiton subsidiary, Coal Operations Australia Limited (COAL).
Coal Operations Australia Limited was awarded the Mount Arthur North Coal
Exploration Area in July 1998 after a public tendering process. Following
exhaustive exploration, mine planning, environmental analysis and community
consultation, the Company received Development Consent in May 2001 and was
granted a Mining Lease in June 2001.
Further information can be found on our Internet site: http://
www.bhpbilliton.com
ENQUIRIES:
Australia
Dr. Robert Porter, Investor Relations
Tel: + 61 3 9609 3540 Mobile: +61 419 587 456
email: Robert.Porter@bhpbilliton.com
Mandy Frostick, Media Relations
Tel: +61 3 9609 4157 Mobile: +61 419 546 245
email: Mandy.J.Frostick@bhpbilliton.com
United Kingdom
Marc Gonsalves, Investor Relations & Communication
Tel: +44 20 7747 3956 Mobile: +44 7768 264 950
email: Marc.Gonsalves@bhpbilliton.com
South Africa
Michael Campbell, Investor & Media Relations
Tel: +27 11 376 3360 Mobile: +27 82 458 2587
email: Mike.Campbell@bhpbilliton.com
United States
Francis McAllister, Investor Relations
Tel: +1 713 961 8625 Mobile: +1 713 480 3699
email: Francis.R.McAllister@bhpbilliton.com
In respect of the information in this release relating to stated coal
resources, this information is based on and accurately reflects information
compiled by Pieter R Grey FAusIMM, CP Geo a fulltime employee and Manager
Geology with Coal Operations Australia Limited, a wholly owned subsidiary of
BHP Billiton. Mr Grey has sufficient experience, which is relevant to the
style of mineralisation and type of deposit under consideration and to the
activity, which he is 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.
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