BHP to build WA ore portFont Size: | June 29, 2007 BHP BILLITON yesterday signalled a major acceleration of its long-term iron ore expansion plans and said it was focused on developing a new, wholly owned port near Port Hedland.
Ian Ashby, BHP's head of iron ore, said the company was now planning to double iron ore production to 300 million tonnes by at least 2015, if not before.
He warned that if port bottlenecks in NSW and Queensland were replicated in Western Australia the country would lose market share in iron ore.
"Our competitors are out there aggressively taking Australia's market share and we can't procrastinate too long on taking some of these decisions," Mr Ashby told the Port Hedland Port Authority conference.
Mr Ashby virtually ruled out BHP participating in the WA Government's preliminary proposals for developing a multi-user iron ore port on Ronsard Island, 60km west of Port Hedland. He said it was too far away and risked being slower to establish than a wholly owned port.
"What we don't want is what is happening on the east coast of Australia," Mr Ashby said.
"We don't think Ronsard Island is the right location."
He said multi-owner ports like Newcastle and multi-user ports like Dalrymple Bay were overly complex to operate and took longer to approve expansions.
Massive ship queues off Newcastle and Dalrymple Bay are costing the coal industry there hundreds of million of dollars in penalty charges, as ships wait for weeks to load because of a lack of port and rail capacity, and overbooking by miners.
BHP is in the process of raising production and shipping capacity at its Pilbara iron ore operations to 129 million tonnes by the end of this year, and has additional plans to raise that to 155 million tonnes by mid-2010.
BHP had signalled it was looking to further boost production to about 300 million tonnes within the next 10-20 years, but Mr Ashby said the company was now planning to bring that on in six or eight years time. "We can see (production) doubling over the next six years or so," Mr Ashby said.
"We need to be thinking about being at around 300 million tonnes by the middle of next decade."
BHP's iron ore rival, Rio Tinto, earlier this month signalled a similarly aggressive expansion in the Pilbara as the two race to capture a greater slice of rising Chinese demand. New entrant Fortescue Metals also wants to expand beyond the 45 million tonnes a year targeted by its Chichester Ranges project, to as much as 200 million tonnes.
Rio plans to raise its Pilbara iron ore capacity from 170 million tonnes to 220 million tonnes by 2009, and is examining plans to raise capacity to 320 million tonnes within the next 5-10 years. Rio is also on the hunt for a new port site to supplement its Dampier and Cape Lambert ports.
Benchmark contract iron ore prices have increased by 140 per cent in the last five years and are being tipped to rise by 10 per cent or more in the next year
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