BHP Billiton Invests $367 Million To Grow Newcastle Coal Facility

BHP Billiton Ltd. (BHP) has given the go-ahead to invest US$367 million to expand the Newcastle coal port in eastern Australia, the mining giant said Wednesday.

The expansion project will increase capacity at the coal terminal to 66 million metric tons a year from 53 million, and increase BHP's allocation at the port by a further 4.6 million tons to take it to 19.2 million tons a year, the Melbourne-based company said in a statement.

The increased export capability supports the expansion of BHP's energy coal mines in New South Wales to meet rising demand for the fuel, particularly in growing Asian economies.

"We are steadily growing the Mt. Arthur mine and evaluating the development of Caroona," said Jimmy Wilson, president of BHP's energy coal division. "This port expansion underpins the future of these two sites."

The Mt. Arthur coal mine is located about five kilometers south of Muswellbrook in the Hunter Valley, and the Caroona project is in the Gunnedah Basin in northwestern New South Wales.

BHP said the first coal on a new ship loader is scheduled for financial 2014, with the terminal expected to operate at full capacity within the following 12 months.

BHP has an almost 36% stake in the Newcastle Coal Infrastructure Group. Centennial Coal, Donaldson Coal, Peabody Energy Corp. (BTU), Yancoal and Whitehaven Coal Ltd. (WHC.AU) are all partners in the port operation, according to Newcastle Coal's website.

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]