PERTH (miningweekly.com) – Mining major BHP has approved a $184-million initial investment into the South Flank iron-ore project, in the Pilbara.
The South Flank operation will leverage and expand on the existing Mining Area C hub, and is BHP's preferred option to replace the 80-million-tonne-a-year Yandi mine, which will reach the end of its mine life in early- to mid-2020.
First ore from the South Flank operation is being targeted for 2021, and the project ramp-up will coincide with the ramp-down of the Yandi operation.
The project will be submitted for board approval in mid-2018.
BHP president for operations, Minerals Australia, Mike Henry said on Monday that the initial funding for the South Flank operation would generate several hundred construction jobs and provide exciting opportunities for Western Australian suppliers.
The initial funding would be used primarily for the expansion of accommodation facilities to support current and future workforce requirements.
“As well as supporting our current operational requirements, this work will advance potential first ore from South Flank, while we further optimise the full development and progress external and internal approvals. As we have said previously, a continuing stable investment environment in Western Australia is required to underpin ongoing investment in the business, including this project.”
Henry noted that the capital efficient South Flank project was a compelling option to replace Yandi production, and offered attractive returns, with its high-grade lump and fines ore, and a strip ratio in line with the Western Australian iron-ore operation average, which would establish it as a highly competitive operation.
The South Flank operation is expected to average a capital cost of between $30/t and $40/t, with expenditure fitting into the Western Australian iron-ore operations' previously indicated average sustaining capital expenditure of $4/t over the next five years.
“The capital efficiency of South Flank is underpinned by the planned use of existing infrastructure at the Mining Area C operation, which would, if approved, become one of the largest standalone iron-ore processing centers in the world, within reach of several billion tonnes of high-grade ore,” Henry concluded.