BHP Billiton Limited (ASX: BHP) has today announced the approval of US$2.9 billion in capital expenditure for the Pilbara-based South Flank iron ore project worth a total of US$3.4 billion.
BHP own 85% of the project, with Japanese companies ITOCHU Minerals and Mitsui Iron Ore Corporation owning the remaining 15% interest.
The South Flank project will fully replace production at the Yandi mine, which is reaching the end of its economic life, with the first ore from South Flank likely to yield by 2021 and at least a 25-year life expectancy on the project.
The news should be uplifting for investors after BHP came under pressure from declining oil prices earlier this week, alongside energy producing peers Santos Ltd (ASX: STO) and Rio Tinto Limited (ASX: RIO).
BHP's shares have held their own well of late, despite global pressures, including a worker strike at Rio's Escondida mine in Chile earlier this month – a project in which BHP has a 57.5% stake.
