BHP Billiton approves Douglas-Middelburg Optimisation Project worth US$975 million

Monday, Mar 03, 2008

BHP Billiton today announced approval of the Douglas-Middelburg Optimisation (DMO) Project, with an expected capital investment of US$975 million.

The DMO project scope includes utilising reserves across the Douglas and Middelburg Mine Services (MMS) collieries and development of new mining areas with low strip ratio coal, with product being fed into a new 14 Mtpa coal processing plant. The new coal processing plant will replace the existing, less efficient washing plant at Douglas. The project will enable BHP Billiton to maintain energy coal exports from the combined Douglas Colliery and MMS at around current levels (approximately 9.5 Mtpa BHP Billiton share) whilst also fulfilling domestic contractual commitments.

First coal from the new mining areas is expected in mid-2008 and the new plant is expected to receive coal in mid-2010. The anticipated life of mining operations is to 2034.

The Douglas and MMS collieries are currently owned through the Douglas Tavistock Joint Venture (DTJV), in which BHP Billiton has an 84% share and Xstrata has a 16% share. To facilitate the DMO project, which is to be developed and owned solely by BHP Billiton, the DTJV will be restructured with each of the joint venture partners being allocated coal resources according to their ownership share.

A number of regulatory approvals are being sought to give effect to this restructure.

President BHP Billiton Coal, Dave Murray said: “Approval of the DMO project is a core component of BHP Billiton’s coal strategy and is in keeping with BHP Billiton’s focus on operating low-cost, long-life assets. This project allows us to realise maximum value from these assets by optimising the existing reserves at Douglas and MMS and enabling us to maintain exports through to 2034. With the recent approval of the US$450M investment in the Klipspruit Project, our South African coal operations will now comprise of three world class assets, namely Middelburg Mine Services (which now incorporates the resources of Douglas Colliery), Khutala Colliery and Klipspruit Colliery.”

For further information please contact:

Australia
Samantha Evans, Media Relations
Tel: +61 3 9609 2898  Mobile: +61 400 693 915
email: Samantha.Evans@bhpbilliton.com

Don Carroll, Investor Relations
Tel: +61 3 9609 2686  Mobile: +61 417 591 938
email: Don.A.Carroll@bhpbilliton.com

United Kingdom
Andre Liebenberg, Investor Relations
Tel: +44 20 7802 4131  Mobile: +44 7920 236 974
email: Andre.Liebenberg@bhpbilliton.com

Illtud Harri, Media Relations
Tel: +44 20 7802 4195  Mobile: +44 7920 237 246
email: Illtud.Harri@bhpbilliton.com

United States
Tracey Whitehead, Investor & Media Relations
Tel: US +1 713 599 6100 or UK +44 20 7802 4031
Mobile: +44 7917 648 093
email: Tracey.Whitehead@bhpbilliton.com

South Africa 
Alison Gilbert, Investor Relations
Tel: SA +27 11 376 2121 or UK +44 20 7802 4183
Mobile: +44 7769 936 227
email: Alison.Gilbert@bhpbilliton.com

For more BHP Billiton press releases go to www.yourminingnews.com

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