BHP (NYSE:BHP) announced it is going to spend about $9.5 billion to expand Australian iron ore and coal mining operations. BHP has said they have plans in place to spend about $80 billion over the next five years to expand the company.
With commodity prices having soared for years, BHP is looking to grow by organic means rather than through acquisitions, as the valuations of quality companies have skyrocketed and cost in many cases are prohibitive.
The company has also failed at three major takeover tries, and it appears countries are also protecting their raw materials as well, as in the case of Potash Corp. (NYSE:POT) in Canada.
The leading global miner said it would invest $6.6 billion in a total investment of $7.4 billion to continue production growth in the company's western Australian iron ore operations.
Investment will include the development of the Jimblebar mine, rail links and additional berths and ship loaders at its Port Hedland site.
BHP said it had also approved three key metallurgical coal projects at its Bowen Basin site in Queensland.
BHP will put in $2.5 billion of the total $5 billion investment, which will see the new Daunia mine developed, its Broadmeadow mine's life extended by 21 years and the stage three expansion of its Hay Point coal terminal.
In a third statement, the company added it had approved a $400 million investment to expand Hunter Valley Energy Coal in New South Wales with the goal of increasing production.
BHP Billiton closed Friday at $90.07, falling $0.59, or 0.65 percent.
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