BHP Billiton celebrate the export of one billionth tonne of iron ore to Japan

BHP Billiton has celebrated a significant milestone after shipping its one billionth tonne of iron ore to Japan.

BHP iron ore boss Jimmy Wilson was joined by joint venture participants ITOCHU Corporation (ITOCHU) and Mitsui & Co., Ltd (Mitsui) to mark the milestone in front of the Saiko bound for Japan.

Speaking at the event in Port Hedland on Wednesday, Wilson said Japan was a driving force behind the development of iron ore mining in the Pilbara.

BHP shipped its first tonne of the steelmaking ingredient to Japan nearly half a century ago in 1966.

“We also owe much to Japan for their role in growing the iron ore industry in the Pilbara. Our joint venture participants ITOCHU and Mitsui contributed capital, and as trading companies they were a key link into Japanese markets," Wilson said. 

“Over the past decade, we have invested US$24 billion in Western Australia’s mines, rail and port infrastructure and continue to adopt new technology to ensure our operations remain world-class."

BHP Billiton President HSE, Marketing and Technology Mike Henry said that the ore exported to Japan came back to Australia as high-quality manufactured products like motor vehicles and the rolling stock and rail equipment used within the mining industry.

“Today the high-quality iron ore we export from the Pilbara is an essential ingredient for Japan’s high-tech steel industry which leads the world in technology and efficiency,” Henry said.

Last year BHP agreed to sell 15 per cent of its stake in the Jimblebar iron ore mine to ITOCHU and Mitsui for $US1.5 billion.

The deal was aimed at aligning Itochu and Mitsui’s interests across BHP’s Pilbara iron ore operations so assets could be operated in a straightforward and flexible way.

As part of the deal, the Japanese firms will receive an annual output of over 5 million tonnes, plus shares of future production increases.

Jimblebar mine officially opened earlier this year.

The $US3.6 billion project delivered first production in the quarter ending September 2013 and is expected to deliver phase one capacity of 35 million tonnes per annum (Mtpa) per year by the end of the 2015 financial year.

This will increase BHP’s Pilbara supply chain capacity to more than 220 Mtpa.

A low cost option to expand Jimblebar to 55 Mtpa in the longer term would increase this to approximately 260 Mtpa to 270 Mtpa.

Wilson said as the company enters its next phase of growth, improving productivity, optimising capacity and working assets harder would deliver greater benefits to BHP customers.

“The good relationships we have between customers, employees, Indigenous land owners, ITOCHU and Mitsui have been and continue to be crucial to the success of the Western Australian business,” Wilson said.

Image: Perth Now

BHP cuts port expansion budget

BHP Billiton has cut $US400 million ($AU434 million) from its Pilbara expansion budget, pulling back on its plans for a new blending and rail stockyard at Port Hedland.

The West Australian reports the cutbacks will offset a $US340 million expenditure blowout at its Jimblebar iron ore mine, which is currently under construction.

But BHP – which reports all its financials in US dollars – stressed the project is on budget in Australian dollar terms. The project is now estimated to cost $US3.64 billion.

The company sold a 15 per cent stake in the mine in June to ITOCHU Corporation and Mitsui for $US1.5 billion.

In its production report, BHP yesterday said the south stockyard at Port Hedland was no longer included in the scope of works for the port blending and rail yard facilities project

Total iron ore production increased seven per cent for the 2013 financial year to 170 million wet tonnes, leading the company to lift this year’s guidance to about 207 million tonnes.

It remains unclear if trimming back its plans to build the new stockyard will hamper BHP’s plans to remove productivity bottlenecks which could potentially deliver an extra 20 million tonnes per annum of exports, The West Australian reported.

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