By Robb M. Stewart 
 

MELBOURNE, Australia--BHP Billiton Ltd. (BHP.AU) has approved US$184 million in initial funding for a project that would help it maintain iron-ore production in Western Australia when its Yandi mine reaches the end of its economic life in the early-to-mid 2020s.

Funding for the South Flank project in the central Pilbara region will be used mainly for the expansion of accommodation facilities to support the mining company's workforce, generating several hundred construction jobs, BHP said Monday.

BHP's board is expected to consider approval for the project, which would expand an existing mining hub to replace production from the 80 million metric tons a year Yandi mine, in mid-2018 and first ore would be targeted in 2021 in order to ramp up to coincide with a slowdown in output at Yandi.

The South Flank project is a compelling option to replace Yandi production and offers attractive returns, said Mike Henry, president of BHP's Australian minerals operations.

BHP estimated the capital cost for the project would be in a range of US$30 to US$40 a ton.

 

Write to Robb M. Stewart at robb.stewart@wsj.com

 

(END) Dow Jones Newswires

June 25, 2017 20:44 ET (00:44 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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