BHP has just approved US $2.9 billion in capital expenditure for their South Flank project, which is located in Central Pilbara, Western Australia.
The South Flank project is set to fully replace production from the 80 Million Tonnes Per Annum (MTPA) Yandi mine, which is nearing the end of its economic life. Iron ore shipments from the Yandi mine began in 1991. Western Australia is also set to reap the benefits as the South Flank Project is predicted to create around 2,500 construction jobs and generate 600 on-going operational roles, with further opportunities available for Western Australian suppliers.
“South Flank was approved following a thorough evaluation under BHP’s Capital Allocation Framework,” BHP President Operations, Mike Henry said.
“The project will enhance the average quality of BHP’s Western Australia Iron Ore production and will allow us to benefit from price premiums for higher-quality lump and fines products.”
The South Flank project is on track to expand existing infrastructure, commence the development of an 80 MTPA crushing and screening plant, establish an overland conveyor system, pre-strip work, train loading facilities, as well as the procurement of new mining fleet and substantial mine development.
The ore from the South Flank Project is predicted to increase Western Australia Iron Ore (WAIO) average iron grade from 61 per cent to 62 per cent. The overall proportion of the lump is also set to increase from the current 25 per cent to approximately 35 per cent.
“WA is at its core, and is going to be for a long period of time, a mining state and these sorts of decisions highlight that’s not a negative, it’s very much a positive,” voiced WA Treasurer, Ben Wyatt following the announcement.
He also voiced that the project should ‘give Western Australians confidence in the long-term value of the mining industry’.
The first ore from the South Flank Project is estimated for 2021, with the project expected to produce ore for over 25 years.
Image via. BHP.
