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BHP makes multibillion dollar investment in new Pilbara mine

Resources giant BHP recently pressed the button on a new$4.59 billion iron ore mine in the Pilbara which it says will employ 2500 people during construction and 600 when operational. The announcement came as the WA jobs market shows the strongest growth in new positions in five years.

BHP’s South Flank project will operate for 25 years and will replace production from the 80 million-tonne-a-year Yandi mine, which is almost exhausted. “The project will create around 2500 construction jobs, more than 600 ongoing operational roles and generate many opportunities for Western Australian suppliers,” BHP’s head of Minerals Australia, Mike Henry, said.

Major construction work is expected to start next month, depending on when State Government approvals are granted. New train-loading facilities, a crushing and screening plant, and an overland conveyor system need to be built, with the company aiming to have first ore to market in 2021.

South Flank iron ore will help increase BHP’s average iron grade in WA from 61 per cent to 62 per cent, and the overall proportion of lump ore – which allows for more efficient steelmaking than smaller fine ore – from 25 per cent to approximately 35 per cent. Production is expected to start in 2021. “It 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,” Mr Henry said.

BHP has an 85 per cent stake in South Flank, with the remaining 15 per cent held by ITOCHU Minerals and Energy of Australia Pty Ltd (8%) and Mitsui Iron Ore Corporation Pty Ltd(7%). In addition to BHP’s investment of $A3.9 billion in the project, the Japanese corporations will also contribute, bringing the total cost of the project to $A4.59 billion. This is in addition to an initial funding commitment of $290 million in June 2017, primarily for the expansion of accommodation facilities to support current and future workforce requirements. 

Premier Mark McGowan commented:“It is a great day for WA jobs and a great sign for the State’s economy. I congratulate BHP and its joint venture partners on this significant announcement, which will provide thousands of jobs for Western Australians. The investment is welcome news for Western Australia, and yet another sign that the economy is turning the corner and jobs are being created for Western Australians.”