BHP rules out new mining projects in QLD

BHP Billiton head Marius Kloppers has essentially ruled out new mining projects in Queensland.

Speaking at the Brisbane Mining Club yesterday, Kloppers said BHP believes it would be "extraordinarily difficult" to justify spending the money needed to develop new projects, according to CQ News.

He explained that greenfield projects are essentially impossible for the miner to justify.

I'm talking about major things,"Kloppers said.

"I'm not talking about what we're going to do with the Caval Ridge project, which is to add a new 2 million tonnes (of coal per year) then maybe squeeze out another two.

"Those sort of things you can make pay.

"What is extraordinarily difficult is to open up brand new greenfield mines, ports, rail and so on.

"It is particularly unfortunate, that these costs are increasing at a time when industry profitability is declining."

Currently BHP operates a number of mines through BMA, its joint venture with Mitsubishi, as well as its stake in the Hay Point and Abbot Point coal terminals.

Kloppers went on to say that it would likely be wielding the knife again if operations are not profitable in the region, pointing to the two mines it closed – the Norwich Park coal mine, and the recently closed Gregory open cut mine, as examples.

It also recently dumped plans for two new major projects – the Red Hill mine and the Saraji East development.

Study on the two expansions has been shelved and BMA has withdrawn the projects from the Federal Government's environmental approvals process.

The move follows a blanket statement in the company's profit announcement earlier this year that no major projects would be approved in 2012-13

Kloppers added that the Peaks Downs expansion will also be delayed, and that its Caval Ridge project will depend on 'market conditions'.

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