That’s the face of BHP’s smiling assassin, Jimmy Wilson head of the iron ore division, who today unloads some remarkable optimism on AFR readers:
BHP Billiton has vowed to supply iron ore as cheaply as arch rival Rio Tinto and will considering reactivating its $20 billion outer-harbour project at Port Hedland as it pushes ahead with an aggressive production plan.
…He says the miner will never be in a competition with Rio on volumes but stressed “where we would like to compete is on the cost of production side, more importantly, the margin per tonne that we make”.
But to grow production beyond 270 million tonnes, BHP will need to either tap options for two additional berths in the inner harbour in Port Hedland in a $US600 million ($640 million) to $US800 million development, or push the button on resurrecting the $20 billion outer harbour project.
It appears the miner is leaning towards the latter.
“We want to max out the inner harbour, then we’ll go to the outer harbour,” he says. “[But] putting additional capacity into the inner harbour . . . I think that is quite unlikely.”
That’s pretty funny, not competing on volumes, nice one. Nonetheless, I’ll be happy to take a sportsman’s bet that if outer harbour is resuscitated in the next decade then I’ll streak naked through Port Hedland yelling “I’m that idiotic blogger”.
Outer Harbour would enable BHP to ship another 80 million tonnes of iron ore capacity that is not currently in anyone’s models, the last thing the iron ore market needs in the years ahead
However, the rhetoric is not entirely idle. Threatening such an expansion can only accelerate the demise of other Port Hedland iron ore users like Atlas Iron, and BHP could perhaps pick up their port allocation.
Souerce: Macrobusiness
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