BHP Billiton and Mitsubishi Corp will invest a total of $4.2bn (£2.6bn) to expand coal mining in Australia and are looking at further investments, BHP said yesterday.
The project initially will add 8m tonnes per year capacity in exports of metallurgical coal used in making steel, with an expectation of a rapid, low-cost expansion to 10m tonnes per year, BHP said.
BHP and Mitsubishi operate a 50-50 joint venture covering seven mines in Australia’s Bowen Basin region and will each contribute $2.1bn to the work. The work will require development of a new mine, Caval Ridge, and expansion of the alliance’s Peak Downs colliery. Production will start in 2014 and run for more than 60 years, BHP said.
“This is a continuation of BHP Billiton’s strategy of investing in large, low cost, expandable mines with long lives,” BHP’s metallurgical coal division president, Hubie van Dalsen, said in a statement.
“Additional expansion projects are being advanced to follow this investment in due course,” he said.
Mines owned under the BHP-Mitsubishi alliance have a combined output capacity of more than 58m tonnes per year of mostly metallurgical coal, representing about a fifth of annual global trade.