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BHP Billiton plans trebling iron ore capacity..
Source: The Australian.

BHP Billiton has flagged plans to add an extra 240 million tonnes of iron ore capacity to its big Pilbara iron ore operations in Western Australia, if the market can handle it.

The big miner has released an environmental review for the plans to develop a so-called outer harbour at Port Hedland, which is the path to expansion it will have to take now that its $116 billion iron ore joint venture with Rio has fallen through.

The development will rely on market conditions and be done in four stages, BHP said in the documents, which have been released for public comment.

The Port Hedland plan means BHP is looking at more than trebling its current output of about 150 million tonnes a year to 480 million tonnes a year from as early as 2020.

Previously, BHP had said it had the potential to go to more than 350 million tonnes a year.

The Pilbara region produces just under 40 per cent of the world's iron ore, an essential ingredient in steelmaking with each tonne of steel needing about 1.5 tonnes of iron ore.

Port Hedland's inner harbour is already approaching capacity owing to BHP's recently announced plans to spend $US7.4bn ($7bn) to raise exports from the Pilbara to 220 million tonnes a year by 2014, with $US2.3bn of the total set aside for Port Hedland's inner harbour.

The miner has allocated capacity of 240 million tonnes a year in the inner harbour.

Fortescue also plans to raise its exports from Port Hedland to 155 million tonnes a year by 2014, and several smaller miners such as Atlas Iron have agreed allocations at the terminal

Project statements of this type frequently provide an aggressive estimate of new capacity to allow room for future expansions.

The BHP development would take place over four stages, each taking 2-3 years to complete.