What’s the big news on BHP Billiton?

What’s the big news on BHP Billiton?

Let’s first get to know BHP.

With its global headquarters in Melbourne, BHP is a world-leading resources company. The firm has a strong workforce of 60,000 employees and is involved in the extraction and processing of minerals, oil and gas. Along with a successful business track record, BHP also understands the role of CSR (corporate social responsibility) in business ethics.

In the recent times, BHP has approved a project for the development of its South Flank iron ore in Western Australia to replace the existing mines, worth the value of $2.9 billion.

BHP is enthusiastically looking forward to the beginning of production in 2021. The project intends to replace the depleting mines rather than adding new supply, as confirmed by the firm.

What are the benefits of the project?

South Flank’s development will help BHP enhance the quality of its iron ore at a time when a high-grade material is selling at skyrocketing prices. The steps taken by China to effectively minimize pollution have increased the iron ore costs as mills seek more efficient grades. This implies that they need less of the material to make the same amount of steel.

BHP’s overall iron ore grade will go up to 62 percent from 61 percent with this development. In comparison with its competitors, BHP does not have the higher-grade ores. BHP is yet to hit its peak even as the global market is well supplied. The firm plans to lift output to 290 million tons by mid-2019.

South Flank could produce as much as 80 million tons a year if approved and would replace the Yandi mine once it’s depleted.

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