Australian resources company BHP Billiton is going to make a capital investment of $9.5 billion to expand its Australian iron ore and coal mining operations. The largest miner in the world has now planned to expand its own mines after it failed to take over three acquisition targets in the last year.
The rising demand for commodities in Asia has made the mining giant plan this huge investment with some confidence. The move also shows that mining taxes being revised and carbon taxes being implemented are not influencing its operational decisions.
Over the next five years BHP Billiton is planning to make investments worth $80 billion in its Pilbara iron ore, Bowen Basin coal and Hunter Valley projects. This is similar to the average spending that Rio Tinto has planned for its own existing projects.
The Jimblebar mine will see new mining equipment and rolling stock along with rail links being built. About $3.3 billion will be spent here while $2 billion will be used to improve infrastructure such as adding new berths, ship loaders etc at Port Hedland.
Three metallurgical coal projects will also be developed in central Queensland in the Bowen Basin which will cost an additional $5 billion. The company is planning an investment of $400 million to increase the thermal coal production by 4 million tons annually by expanding the Hunter Valley Energy Coal project in New South Wales.
The Melbourne based company gave the green signal for spending on all these planned expansions at existing assets one day after the Australian government agreed to tax their profits at 30% and repay current royalties paid to the state governments.