BHP Billiton iron ore boss Jimmy Wilson has dismissed suggestions that the era of multi-billion-dollar greenfields iron projects in the Pilbara has come to an end, even as the mining giant focuses on extracting efficiencies rather than building new mines.
Mr Wilson also refused to be drawn into forecasting the iron ore price amid fears it could tumble in response to patchy Chinese economic data. He said few ¬people had any idea about the outlook for Australia’s most valuable export commodity.
Speaking at the opening of BHP’s $US3.6 billion ($3.9bn) Jimblebar mine near the town of Newman, Mr Wilson said he and his team had “impressed ourselves” by boosting production forecasts from its West Australian operations from 207 million ¬tonnes per annum to 217mtpa for this financial year.
The improved outlook had been achieved through operational improvements, productivity gains and technological innovation rather than any major capital spending. But Mr Wilson rejected suggestions that Jimblebar, along with Gina Rinehart’s $10bn Roy Hill project, could be the last greenfields mines of the Pilbara iron ore boom.
He said the reluctance by miners to allocate billions of dollars towards new mines was driven by the fact that Chinese raw steel production had slumped from a growth rate of 24 per cent almost a decade ago to as low as 3.4 per cent in coming years.
“I think a lot of the companies are focused on efficiency and effectiveness … which is something they haven’t been able to fully capture during this massive growth phase,” he said. “But to say that this (Jimblebar) is going to be the last greenfields mine outside (Roy Hill) would be a bit of a stretch in my view, over the next decade at least.”
State Premier Colin Barnett said he believed greenfields mines in the Pilbara would be built only to replace those that had run their course. “Western Australia currently supplies about 60 per cent of China’s imports of iron ore. I think that will continue to grow but at a slower rate,” Mr Barnett said.
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