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BHP greenlights US$2.9B South Flank development

BHP Billiton Group's board approved the US$2.9 billion development of its South Flank iron ore project, part of the Area C property in Western Australia.

South Flank will fully replace production from the 80 million-tonne-per-year Yandi iron ore mine, which is reaching the end of its economic life.

The project expands the existing infrastructure at Area C and involves building an 80 Mt/y crushing and screening plant, an overland conveyor system, and stockyard and train loading facilities, procuring a new mining fleet, and substantial mine development and pre-strip work.

First production from South Flank is targeted in 2021, and the project is expected to produce ore for over 25 years.

It will create about 2,500 construction jobs and more than 600 ongoing operational roles.

BHP said in a June 14 release that South Flank will contribute to an increase in its Western Australia Iron Ore's average iron grade from 61% to 62%.

"South Flank is a capital efficient project which offers attractive returns, and which was approved following a thorough evaluation under BHP's Capital Allocation Framework," said Mike Henry, president of operations at BHP Minerals Australia.

In June 2017, BHP approved an initial funding of US$184 million, primarily for expanding accommodation facilities to support workforce requirements.

The mining major secured conditional approval in December 2017 from Western Australia's Environment Protection Authority to develop South Flank.