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BHP Presents Plans for Port Hedland Expansion

[BHP released its environmental impact statement today. Port Hedland, which is pictured in #msg-53728652, is the main port for the Pilbara region of Australia that produces about 40% of the worldwide supply of iron ore.]

http://online.wsj.com/article/SB10001424052748703916004576270084085833522.html

›APRIL 18, 2011, 4:38 A.M. ET
By DAVID FICKLING And DAVID WINNING

SYDNEY—BHP Billiton Ltd. took a key step toward more than doubling its iron ore production in the Pilbara region of Western Australia state, releasing an environmental review Monday on its plans to develop a new harbor at Port Hedland.

The development at Port Hedland would see BHP's exports from the site increase from around 150 million metric tons a year now to 350 million tons a year by 2020, according to a presentation put out by the miner last month. Port Hedland is the world's second-largest iron ore port after the terminals at Sao Luis in Brazil, the export point for Vale SA's massive Carajas iron ore deposit.

BHP, Rio Tinto PLC and Fortescue Metals Group—the three major miners in the Pilbara—plan to add 50% to their production from the region in just over three years.

The Pilbara—an arid, remote area of Australia's far northwest—produces just under 40% of the world's iron ore, an essential ingredient in steelmaking with each ton of steel needing around 1.5 tons of iron ore.

Port Hedland's inner harbor is already approaching capacity owing to BHP's recently announced plans to spend US$7.4 billion to raise exports from the Pilbara to 220 million tons a year by 2014, with US$2.3 billion of the total set aside for Port Hedland's inner harbor. The miner has allocated capacity of 240 million tons a year in the inner harbor.

Fortescue also plans to raise its exports from Port Hedland to 155 million tons a year by the same date, and several smaller miners such as Atlas Iron Ltd. have agreed allocations at the terminal.

In the company's environmental impact statement, released for public comment Monday, the miner said it would aim for 240 million tons of capacity from the outer harbor, with shipping berths for eight bulk carriers. Project statements of this type frequently provide an aggressive estimate of new capacity to allow room for future expansions.

The development would take place over four stages, each taking two to three years to complete.‹