Expenditure of US$1.094 billion by BHP Billiton will help ensure installed capacity of its Western Australia Iron Ore business will be at least 200 million tonnes per annum by 2011.

The funds represent pre-approval expenditure for Rapid Growth Project 5 (RGP5) in the Pilbara area and will be used to begin duplication of the railway track between the Yandi mine and Port Hedland and begin the expansion of the inner harbour at Port Hedland.

Construction of the second railway is expected to begin in May 2008, subject to various government approvals. Early funding will also allow early procurement of long lead items and detailed engineering studies to expand capacity at Yandi and Area C.

BHP Billiton Iron Ore president Ian Ashby says: "The core of the Pilbara is progressively moving to the Yandi/Area C mining hubs. Double tracking the rail to this area will create the rail capacity to support our planned expansion to more than 300 million tonnes per annum.

"In parallel with this project, we are advancing our studies on the outer harbour development at Port Hedland. Combined with the RGP5 rail work, the port expansion would complete the major infrastructure requirements to support an operation of more than 350 million tonnes per annum," he said.

In the last quarter BHP Billiton delivered RGP3 which expanded the capacity at Area C by 20 million tonnes per annum and RGP4 is on track to increase installed capacity to 155 million tonnes per annum in 2010.

The approval for the balance of the RGP5 capital is expected during the second half of 2008.

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