BHP has announced a $3.9 billion project to develop the South Flank iron ore project in the Pilbara.

The company has approved investment plans for the mine it holds an 85 per cent stake in, with ITOCHU and Mitsui controlling the remaining 15 per cent.

The total cost for the owners of the South Flank project is forecast at $4.5 billion.

South Flank is intended to replace production from BHP’s 80Mt/y Yandi mine, which will reach the end of its economic life in the next decade.

BHP will expand its existing infrastructure at Mining Area C with a 80Mt/y crushing and screening plant, overland conveyor system, stockyard and train loading facilities.

It will also procure a new mining fleet and substantial mine development and pre-strip work.

BHP the first ore should be pulled from South Flank in 2021.

“The project will create around 2500 construction jobs, more than 600 ongoing operational roles and generate many opportunities for Western Australian suppliers,” said BHP’s Mike Henry.

“It will enhance the average quality of BHP’s Western Australia Iron Ore (WAIO) production and will allow us to benefit from price premiums for higher-quality lump and fines products.”