Mining and Heavy Industries

BHP approves South Flank funding

BHP iron ore train. Photo: BHP Billiton

Mining giant BHP Billiton has approved $244 million in initial funding for the South Flank sustaining mine project in the central Pilbara, Western Australia.

BHP minerals Australia boss Mike Henry said the funding would generate several hundred construction jobs and provide exciting opportunities for Western Australian suppliers.

The miner says its South Flank project is its preferred option to replace production from the 80mtpa Yandi mine when it reaches the end of its economic life in the early-to-mid 2020s.

The project will leverage and expand the existing Mining Area C hub, and is expected to be submitted for Board approval in the middle of the 2018 calendar year, with first ore targeted in the 2021 calendar year.

From there, ramp-up will be timed to coincide with the ramp-down of Yandi, BHP said.

Henry said the full development of South Flank would generate several thousand jobs during construction.

He also said the capital efficient South Flank project was a compelling option to replace Yandi production and offered attractive returns, with high-grade lump and fines ore and a strip ratio in line with the WAIO average.

He said the initial funding would be used for the expansion of accommodation facilities to support current and future workforce requirements.

“As well as supporting our current operational requirements, this work will advance potential first ore from South Flank, while we further optimise the full development and progress external and internal approvals,” Henry outlined.

“As we have said previously, a continuing stable investment environment in Western Australia is required to underpin ongoing investment in the business, including this project.”

The capital cost for South Flank is expected to be in the range of US$30 to US$40 per tonne.

“The capital efficiency of South Flank is underpinned by the planned use of existing infrastructure at the Mining Area C operation, which would, if approved, become one of the largest standalone iron ore processing centers in the world, within reach of several billion tonnes of high-grade ore,” Henry said.

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