HomeBase MetalsBHP to jettison US$20 billion port expansion plan

BHP to jettison US$20 billion port expansion plan

Port Hedland 
Sydney, Australia — 15 August, 2012 – The investment community appears to have given up hope that global mining giant BHP Billiton will go ahead and approve its US$20 billion outer harbour project at Port Hedland, in Australia.

Reporting this development here, the “Sydney Morning Herald” says suspicions have been building for months that BHP won’t give the go-ahead to the iron-ore expansion plan. In the past 24 hours both JP Morgan and Deutsche Bank have declared that they expect the project to be axed, the newspaper adds.

Both suggested that BHP’s new iron ore boss Jimmy Wilson would seek more modest capacity increases through upgrades to Port Hedland’s inner harbour, or possibly through building a much smaller version of the outer harbour.

The investment banks also suggested that extra port capacity might open up for BHP if an alliance of smaller companies “’ including Atlas Iron “’ did not take up an option to use all of their port capacity.

BHP is expected to reveal more about its expansion plans when it reports its full-year results next week, with a profit of about US$16.5 billion expected.

BHP’s cash flows have taken a hit this year as commodity prices have fallen, while investors have been demanding better returns rather than constant expansion at all costs.

Source: Sydney Morning Herald. For more information, click here.