BHP Billiton and Japanese Trading Houses Expand Iron Ore Supply in Australia

BHP Billiton, Itochu Corporation and Mitsui Corporation announced on Friday they start the sixth expansion phase of their iron ore joint venture in West Australia, RGP6. They will expand the shipment capacity of RGP by 35 million tonnes to 240 million tonnes per year in 2013 with the investment of US$ 193 billion. They will initially order engineering works, required machines and facilities.

They will decide the detailed plan of RGP6 during the last half of 2010 to expand the supply network from the iron ore mine to the shipping quay. They follow the demand growth such from China by sustainable enhancement of supply capacity.

The first phase of RGP6 covers expansions of a port and a railway in Pilbara area as well as Jimblebar mine. They start to purchase required machines and facilities while to make a detailed plan for the railway and port constructions. Itochu Corporation invests approximately 9.6 billion yen while Mitsui Corporation around 8.4 billion yen.

BHP Billiton agreed with Rio Tinto to integrate their iron ore businesses in West Australia in 2009. Rio Tinto reserves a right to enter RGP6 with a certain investment.

RGP is controlled by BHP Billiton with 85% shares with Itochu Corp‘s 8% and Mitsui Corp’s 7%. The annual shipment totaled 129 million tonnes in 2009. The shipment capacity was expanded to 155 million tonnes in 2009 when RGP4 construction works completed.

RGP5 expansion project is under construction at present to expand the shipment capacity to 205 million tonnes by increasing output of Yandi mine within 2011.