BHP Billiton recently announced approval of Rapid Growth Project 2 (RGP2), a $US575 million (*BHP Billiton share US$489 million) project that will expand the capacity of its Western Australia iron ore operations from 110 to 118 million tonnes per annum during the second half of calendar year 2006.

RGP2 will include the development of a new brockman resource, Orebody 18, with an initial capacity of 8 million tonnes per annum, together with plant modifications at the existing Orebody 25 mine, and additional rail and port capacity.

Group President Carbon Steel Materials, Bob Kirkby, said: “This latest expansion is a key component of BHP Billiton’s plans to incrementally expand iron ore infrastructure and systems capacity in line with market demand. It continues BHP Billiton’s commitment to ensuring that we can supply the significant increase in demand for steelmaking raw materials from our customers.”

“In October last year, we opened the Area C mine and complemented this development with the completion of the port and railroad Products and Capacity Expansion Project in January 2004. By June 2004, a further expansion to increase installed operating capacity to 100 million tonnes per annum was completed and commissioning is now underway on the Rapid Growth Project 1 to increase capacity to 110Mtpa,” Mr. Kirkby said.

“A feasibility study is also currently underway to determine the optimum iron ore production, railing, processing and shipping infrastructure for tonnages of at least 145 million tonnes per annum. This study is due for completion in early 2005.”

Orebody 18 contains total resources of 178 million tonnes; comprising a measured resource of 136 million tonnes, indicated resource of 38Mt and inferred resource of 4 million tonnes.

$US86 million will be provided by BHP Billiton Joint Venture Partners ITOCHU Minerals & Energy of Australia and Mitsui Iron Ore Corp.

Key mining elements of the RGP2 project include:

• Development of the Orebody 18 brockman resource, near Newman, to add to the blend of ores from the Mt Whaleback, Satellite Orebodies and Jimblebar mines.
• Initial production at Orebody 18 will be 8 million tonnes per annum, although capacity of 12 million tonnes per annum will be installed.
• Modifications to the Orebody 25 mine to produce additional brockman lump and fines products.

Key port elements of the RGP2 project include:

• The construction of a new car dumping facility and ancillary works.
• The car dumper will have an ultimate capacity of 40 million tonnes per annum, however this will be limited to 8 million tonnes per annum initially. Future expansion projects will realize the additional capacity in the car dumper as further downstream capacity is installed.
• This additional car dumping capacity will allow upgrades to existing dumpers to be undertaken in readiness for future market growth.

Key rail elements of the RGP2 project include:

• The procurement of additional railway rolling stock.
• Additional railway to support the new mines and car dumper.

Note: Information is based on information compiled by P. Schultz, MAusIMM who is a full time employee of BHP Billiton Iron Ore Pty Ltd. Mr. Schultz has sufficient experience relevant to the style and type of deposit and to the activity that is undertaken to qualify as a Competent Person.