BHP says committed to $20 billion Australian port project

LONDON Fri Aug 24, 2012 9:49am EDT

A BHP Billiton logo is seen in the foyer of the company's headquarters in Melbourne November 30, 2003. REUTERS/Tim Wimborne

A BHP Billiton logo is seen in the foyer of the company's headquarters in Melbourne November 30, 2003.

Credit: Reuters/Tim Wimborne

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LONDON (Reuters) - BHP Billiton (BLT.L) (BHP.AX), the world's largest miner, said it was still committed to a $20 billion expansion of the harbour at one of Australia's biggest ports, Port Hedland, after it signaled earlier in the week it would delay the investment.

"The outer harbour continues to be an important part of our long-term strategy," BHP's head of iron ore, Jimmy Wilson, said on Friday.

The miner said on Wednesday it was shelving at least one of three major projects, the $20 billion Olympic Dam copper expansion, and putting all approvals on hold as it battles costs, slumping prices and an uncertain outlook.

It left open the question of whether it would press ahead with its two other mega investments, including building the outer harbour at Port Hedland.

Chief Executive Marius Kloppers said then that BHP would focus on squeezing as much as it could out of the existing inner harbour port, where efficiencies could mean spare capacity in years to come, before pushing on with a new harbour.

But the company sought on Friday to confirm its commitment to a "dual harbour" strategy, announcing it had been given the right to develop develop two additional berths in the inner harbour, part of its push to stretch capacity.

"Development of the outer harbour remains attractive," Wilson said, but adding that development would require costly construction including dredging a shipping channel and a four-kilometre jetty.

The right to develop the berths combined with efforts to ease congestion in the inner harbour would meanwhile allow the company to boost port capacity at a lower cost, Wilson added.

(Reporting by Clara Ferreira-Marques)

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