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Major mining projects approved in lift to sector

AuBJ – 29 August – Up to a dozen major mining projects are set to be given the go ahead over the coming year, in stark contrast to recent fears of the mining ‘boom’ having ended.

Although the scale of the projects are less than the massive developments undertaken by heavyweights Rio Tinto, BHP Billiton, and Fortescue Metals Group over the past decade, several other established miners and new players are now looking to enter the fray with significant projects of their own, as well as the former ‘big three’ continuing with further expansion plans.

Rio Tinto, BHP and FMG have spent more than $50 billion expanding their Pilbara operations and although all three have a newfound focus on cost control, this has not yet stopped their expansion plans completely.

On a smaller scale, Atlas Iron is continuing to expand its Pilbara operations, Mineral Resources is preparing to start construction of another mine, and Iron Ore Holdings is working towards being a new entrant to the sector.

Elsewhere Hancock Prospecting continues to work away at its Roy Hill project, despite this having been held up by the finalising of a $7 billion debt funding package.

Equity investors are nonetheless funding a lot of activity, with a corporate headquarters and remote operations centre under construction at Perth Airport, a 2,000-bed village being built at the Roy Hill mine site, a 1,200-bed accommodation camp nearing completion at South Hedland, and earthworks already under way for the mine processing plant.

Roy Hill is not the only big new mine under assessment with Rio Tinto aiming to lift its Pilbara production capacity to 360 million tonnes by 2015.

BHP also announced plans for growth last week saying the “ultimate goal” for its Pilbara iron ore expansion was an annual production of 260-270mt.

Although falling short of the 300mt former chief executive Marius Kloppers predicted in February, it still entails big growth from the current capacity of 220mt and certainly doesn’t portray the ‘doom’ the industry experts have been fearing.

Finally, FMG announced a US$1.15 billion deal last week with Taiwan’s largest company – Formosa Plastics Group – to develop the Iron Bridge project.

In addition, having opened its fourth berth at Port Hedland earlier this month, FMG is now planning to start construction of a fifth berth later this year.

Chief executive officer Nev Power insists there is still plenty of scope for further expansion saying, “At the moment, 155mt is not a challenge and we see ability for the port to go well beyond its model capacity (of 495mt).”