The mining boom appears to be getting something of a second wind with BHP approving a new $4 billion iron ore project in WA's Pilbara.
BHP's approval of the South Flank mine comes after Fortescue gave the green light to its new $1.3 billion Eliwana project in the Pilbara last month, while Rio Tinto is expected to approve the $3 billion Koodaideri mine before the end of the year.
However, unlike the last massive ramp-up in production which led to a global oversupply of iron ore and crushed prices, the new mines are being brought on stream to replace exhausted reserves in older pits.
The South Flank project is expected to start production in 2021 and have a life span of more than 25 years.
BHP's head of mineral operations, Mike Henry, said the project would fully replace the 80 million tonne per annum production from the Yandi mine which is reaching the end of its economic life.
"The project will create around 2,500 construction jobs, more than 600 ongoing operational roles and generate many opportunities for Western Australian suppliers," Mr Henry said.
Importantly for BHP, the mine should lift the average quality of BHP's Pilbara production at a time higher-quality products are attracting significant premiums to benchmark prices.
