BHP seeks to lift iron ore export capacity
BHP plotting first major expansion of its Pilbara export capacity in years, which could add billions in iron ore revenue.
BHP says it is seeking to lift its West Australian iron ore export capacity by up to 40 million tonnes a year to a top export rate of 330m tonnes a year from Port Hedland, in what would be the first major operational expansion of its Pilbara network in years.
At current iron ore prices of around $US80 a tonne ($124 a tonne) such an expansion could deliver BHP another $5bn a year in iron ore revenue.
BHP is now pushing close to its theoretical 290m tonnes per annum (mtpa) run-rate at Port Hedland, and is looking to lift that cap - constrained partly by its port infrastructure but also through a hard limit on export tonnage and dust restrictions - by as much as 40m tonnes.
The move, if carried through, would allow BHP to close on Rio Tinto’s top run rate, and potentially add billions in additional revenue from the company’s flagship iron ore operations, boosting the royalty take of the West Australian government at the same time.
The iron ore major said on Tuesday it has launched the first stage of community consultation over dust levels at Port Hedland, and will commit up to $400m to reduce dust emissions - a long-running sore point in the community - as part of its plans.
The company has not yet outlined potential capital spending for the expansion, and acting iron ore boss Tim Day said any capacity expansion would only come if market conditions allowed it.
In a statement Mr Day said that while BHP’s focus remains on reaching 290mtpa in the medium term, improvements across the company’s supply chain have provided options to potentially increase future productivity, if market conditions allow.
BHP shares last traded at $30.50.
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