BHP to replace two shiploaders, improve reliability

In a bid to increase the reliability of its inner harbour port facilities, mining heavyweight BHP Billiton (ASX: BHP) will replace two of its shiploaders at Port Hedland at a cost of US$301 million.

The company will replace its existing shiploaders, known simply as SL1 and SL2, which are more than 40 years old and have the capacity to load iron ore at a rate of approximately 10,000 tonnes per hour. In contrast, the new shiploaders will each have a loading capacity of 12,500 tonnes per hour.

The miner’s iron ore president, Jimmy Wilson, recognises it as “an important investment that is consistent with our commitment to maximise the capacity of the Western Australia Iron Ore (WAIO) inner harbour” which will also “deliver substantial value to shareholders and other stakeholders”.

Foolish takeaway

The investment is also set to create additional port capacity as the WAIO supply chain works towards 270 million tonnes per annum. Like others in the industry, including Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG), BHP is heavily ramping up its production of the steelmaking ingredient, with the expectation that demand from China will remain strong for years to come.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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