PERTH (miningweekly.com) – Mining major BHP has awarded a A$260-million mining infrastructure works contract to ASX-listed Cimic, at the newly approved South Flank project, in Western Australia.

BHP overnight approved the $3.4-billion South Flank project, which will replace production from the 80-million-tonne-a-year Yandi mine, by 2021. BHP owns 85% of the project, and is expected to contribute $2.9-billion to project expenditure.

The project will expand the existing infrastructure at Mining Area C, and involves the construction of an 80-million-tonne-a-year crushing and screening plant, an overland conveyor system, stockyard and train loading facilities, procurement of new mining fleet and substantial mine development and pre-strip work.

Cimic on Friday said that its scope of work would include earthworks and concrete works to support the expansion and duplication of the existing rail loop and stockyard, as well as earthwork and concrete work for the development of a new ore processing plant and train load-out facilities.

The services provider will also manage underground services for these operations, including electrical and water services.

Construction is scheduled to start in July, and will conclude in September 2020.

Meanwhile, Western Australian Premier Mark McGowan has welcomed BHP’s investment decision into the South Flank project, saying on Friday that the investment news was yet another sign that the economy was turning the corner and jobs were being created for Western Australians.

“This project alone will create approximately 2 500 jobs during peak construction and more than 600 new jobs once in operation,” McGowan said, adding that South Flank would be the single-largest yearly production iron-ore mine ever developed by BHP.

South Flank iron-ore will contribute to an increase in BHP’s Western Australia Iron Ore (WAIO’s) average iron grade from 61% to 62%, and the overall proportion of lump from 25% to about 35%. It is expected to have a strip ratio in line with the WAIO average.