PERTH (miningweekly.com) – The approval of the proposed South Flank mine, in Western Australia, could supply Asia’s growing demand for higher quality iron-ore, mining major BHP’s iron-ore asset president, Edgar Basto said.

Addressing the Global Iron Ore & Steel Forecast conference, in Perth, Basto noted that the ongoing Chinese supply-side reforms, as well as stringent environmental policies, would continue to drive demand for higher-grade ores.

“The structural improvement in steel capacity utilisation rate and profitability, coupled with more consistent environment regulations have led to a shift in the preference of sea borne iron-ore,” Basto said on Wednesday.

“Steel mills seek out higher quality raw materials to serve the productivity and environmental imperative, while lessening their interest in lower quality products accordingly.”

The proposed South Flank project, which is being targeted for first ore in 2021, to coincide with the ramp-down of the Yandi operation, would produce both lump and fine product and would support an improved quality across BHP’s suite of products, Basto said.

“Total lump proportion of our product would increase from 25 to approximately 35% and the average iron (Fe) grade across our business would increase close to 1%, from 61% to 62%, which would satisfy rising demand of high-grade fines and lump with the structural improvement of steel margins and more stringent environmental standards.

“As well as these benefits, a decision by the Board to progress South Flank would also support the sustainability of our customer’s business. It would sustain the Mining Area C (MAC) fines product for more than 20 years, at large volumes that will be well suited as a base load supply for mills.”

South Flank is likely to operate at a rate of 80-million tonnes a year, and the BHP board was expected to take an investment decision by mid-2018.