BHP produces first South Flank iron ore in W Australia

UK-Australian resources firm BHP has produced its first iron ore from the 80mn t/yr South Flank mine in the Pilbara region of Western Australia. South Flank will replace production from BHP's Yandi mine, also in the Pilbara.

The mine was sanctioned in 2018 at a development cost of $3.6bn.

South Flank and the existing mining area C, which was opened in 2003, will form the largest operating iron ore hub within BHP's operations, producing around 145mn t/yr, BHP said. The original estimate for the cost of the mine was $3.4bn.

"South Flank is Australia's largest new iron ore mine in over 50 years and is on time and on budget," said Edgar Basto, BHP's president of Minerals Australia. The South Flank iron ore will increase BHP's Western Australia Iron Ore's (WAIO) average iron ore grade from 61pc to 62pc and the overall proportion of lump from 25pc to 30-33pc, Basto said.

South Flank will produce iron ore for the next 25 years, taking production to 2046 and replacing the Yandi mine, which will run out of mineable ore over the next 2-7 years. BHP owns 85pc of South Flank and its share of the development costs are estimated at around $3.06bn. The remainder of South Flank is owned by the Australian subsidiaries of Japanese trading houses Itochu and Mitsui.

BHP said last month that it expected to come in at the top half of its iron ore production guidance of 245mn-255mn t on an equity basis for the 2020-21 fiscal year to 30 June, after a strong first nine months in Western Australia and the restart of the Samarco operations in Brazil.

By Kevin Morrison