UPDATE: BHP Billiton Says Iron Ore Expansion Works Resume

BHP Billiton Ltd. (BHP) said Thursday the majority of contractors working on the rail component of its US$4.8 billion Rapid Growth Project 5 iron ore expansion in the Pilbara region of Western Australia have now returned to work after safety issues were resolved.

A spokeswoman for the miner said the company had become concerned that some health and safety requirements weren't being met by the contractor working on the rail line and had asked the contractors to stop work on Monday.

The safety issues have now been resolved and the majority of workers, who are contractors from Leighton Holdings Ltd. (LEI.AU) and Macmahon Holdings Ltd. (MAH.AU), have returned to work with the remainder to return Thursday.

BHP has had a series of fatalities at its iron ore operations in the Pilbara and some have pointed the finger at its reliance on contractors as opposed to the owner-operator model employed by the other big producer in the region Rio Tinto Ltd. (RTP).

BHP and Rio Tinto are planning to form a joint venture in the Pilbara and if it goes ahead their combined iron ore operations will be owner operated.

RGP5 is designed to add 50 million tons of iron ore production a year to BHP's Pilbara operations with the first production due in the second half of 2011.

-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094; [e-mail]