(Bloomberg) -- BHP Group, the world’s largest mining company, says it could build up to 11 more iron ore mines over the next 50 to 100 years in the mineral-rich Pilbara region of northern Australia.
The Melbourne-based miner has signed an agreement with Western Australia’s government to streamline environmental approvals for its long-term iron ore plan. Approval time frames for new mines could be cut by up to 50%.
BHP and rivals are benefiting from a booming iron ore market amid strong Chinese demand and supply disruptions from Brazil to Australia. Prices have skyrocketed 65 percent this year, hitting the highest level in more than five years. Benchmark spot ore prices last traded at $119.50, according to Mysteel Global.
“There is good demand for iron ore and for good quality iron ore,” BHP’s Western Australia Iron Ore Asset President Edgar Basto told ABC radio on Friday. “We see the medium term and long term of the industry fundamentals are there.”
A recent decline in stockpiles at Chinese ports has helped the iron ore price, he said. Those stockpiles, a key indicator of demand in the world’s top consumer, continued their decline in June, with holdings dropping 7.7% to 115.3 million tons, according to Shanghai SteelHome E-Commerce Co. That was the third monthly decline.
BHP is developing the $3 billion South Flank project and has permissions to potentially raise total capacity in Australia to as much as 290 million tons. Production in fiscal 2018 was 275 million tons.
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