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BHP cuts Pilbara expansion budget

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BHP Billiton has cut $US400 million ($AU434 million) from its Pilbara expansion budget, pulling back on its plans for a new blending and rail stockyard at Port Hedland.

The West Australian reports the cutbacks will offset a $US340 million expenditure blowout at its Jimblebar iron ore mine, which is currently under construction.

But BHP – which reports all its financials in US dollars – stressed the project is on budget in Australian dollar terms. The project is now estimated to cost $US3.64 billion.

The company sold a 15 per cent stake in the mine in June to ITOCHU Corporation and Mitsui for $US1.5 billion.

In its production report, BHP yesterday said the south stockyard at Port Hedland was no longer included in the scope of works for the port blending and rail yard facilities project

Total iron ore production increased seven per cent for the 2013 financial year to 170 million wet tonnes, leading the company to lift this year’s guidance to about 207 million tonnes.

It remains unclear if trimming back its plans to build the new stockyard will hamper BHP’s plans to remove productivity bottlenecks which could potentially deliver an extra 20 million tonnes per annum of exports, The West Australian reported.

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