Reconfiguring its Port Hedland set up is the major challenge in BHP Billiton's plans to squeeze an extra 40 million to 50 million tonnes of iron ore a year from its Pilbara operations.
In its annual report released on Tuesday, BHP revised its medium-term Pilbara expansion plan, saying it wanted to produce 260mt to 270mt from WA, up from the 220mt expansion expected to complete this year.
With the outer-harbour development now permanently on hold, BHP iron ore president Jimmy Wilson told analysts in a Tuesday night conference call the company believed that de-bottlenecking existing infrastructure could deliver the extra capacity without a major capital spending program.
"We're reasonably confident we'll be able to get to that sort of capacity in the mining configuration - we know rail is definitely good for it, and I guess port is going to be the challenge," he said.
It is unclear how BHP intends to move beyond its current 240mt allocation through Port Hedland's shipping channel. BHP was granted two extra inner-harbour berths late last year but these did not come with an additional grant of export tonnage. While Port Hedland is still far from its theoretical 500mt export limit, space at the port is expected to tighten substantially in 2015 or 2016, when Gina Rinehart's Roy Hill mine is expected to begin shipping 55mtpa.
Mr Wilson did not outline details of BHP's plans but said he believed the major issue was the configuration of its iron ore handling operations at the port.
"The challenge there is specifically in the stockyards, between the car-dumpers and the shiploaders, and that's going to be the focus," he said.
Mr Wilson did not put a time-frame on the new target, and said the iron ore division would need to compete for capital with other potential projects at BHP.BHP shares closed down 80Â¢, or 2.2 per cent, at $35.74 yesterday.