BHP, Rio to inject $10bn in Australia’s iron ore sector
Mining giants BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO) seem to have shaken off the slowdown blues as they are revealing a combined $10 billion investment in expansions plans at their iron ore operations in Western Australia.
Announcing its Q3 results last week, Rio’s chief executive Sam Walsh hinted at the company being likely to approve a $5bn to $6bn budget to boost the firm’s Aussie iron ore endeavours next month.
And world number one miner BHP has just increased 2013-14 WA iron ore production guidance by five million tonnes to 212 million tonnes, as part of its September quarter report released Tuesday.
While chief executive Andrew Mackenzie did not comment on when BHP could approve a potential expansion of its railways ports and mines, he talked about long-term plans to expand its Jimblebar mine to 55 million tonnes per annum.
That, together with a broader debottlenecking of the supply chain is expected to “underpin capital efficient growth in capacity to approximately 260-270 million tonnes per annum,” he added.
While BHP says it can’t spend more in growth this financial year, analysts quoted by The Australian said that such an expansion, estimated to cost between $4bn and $6bn, is likely to be “very well received”.
Image by Inc/Shutterstock.com