September 08, 2008

BHP eyes railway expansion in Pilbara

AP reported that world's biggest mining company BHP Billiton Ltd is eyeing a doubling of its railway in the Pilbara region of Western Australia as part of a planned USD 20 billion (AUD 22.85 billion) expansion of the division. BHP Billiton operates two heavy haulage railroads in the Pilbara, spanning almost 1,000 kilometres in length.

BHP Billiton has flagged plans to increase its annual iron ore output in Western Australia to 300 million tonnes by 2015 in a bid to satisfy increasing demand from China. It is understood that BHP Billiton is exploring the potential of duplicating its 426 kilometer railway line from Port Hedland to Newman as part of the planned expansion.

It said that duplicating the line could allow the company to run trains on a continuous loop, significantly increasing the tonnage BHP Billiton could rail to port. The current set up sees trains rail ore from Newman to Port Hedland and return empty on the single line.

The privately owned Newman line services the Jimblebar operation and the Mt Newman and Yandi joint ventures, which accounted for more than 70 million tonnes of fiscal year output.

Ms Emma Meade spokesperson of BHP Billiton said that the company was looking at a number of options to increase capacity at its WA iron ore operations. He added that "Given these plans, we're obviously looking at a range of options to help us reach that target but it's still very early days."

BHP Billiton produced about 92 million tonnes of iron ore from its operations in the Pilbara in fiscal year 2007. It described as the “jewel in the crown" by some analysts, with the arm the fourth largest earner for the company in fiscal year 2007, contributing USD 2.738 billion (AUD 3.13 billion).