A file pic from 2013 shows a Fortescue executive at the Solomon iron ore mine in the Pilbara region in Western Australia. Photo: Reuters/David Gray
An iron ore mine in Western Australia's Pilbara region. Photo: Reuters/David Gray

Iron ore miners in Australia are set to spend over $20 billion on new mines and extensions to existing mines in coming years. Most of the money will be spent in the Pilbara region in the country’s northwest.

BHP has just given the green light to a new mine called South Flank, a A$4.7-billion (US$3.5-billion) project expected to come online in 2021 and have a lifespan of about 25 years.

The mine is one of several that will replace exhausted reserves from older mines.

The mine is expected to create about 2,500 jobs, a company spokesman said. It will help replace the 80 million tonnes generated each year from the Yandi mine, which is close to the end of its reserves.

The news follows a decision by Fortescue last month to go ahead with its new A$1.7-billion Eliwana project in the Pilbara.

Meanwhile, Rio Tinto is expected to approve a third new mine called Koodaideri later this year, which is expected to be a A$3-billion project.

Aside from the three new mines, UBS analysts have said big miners plan to spend billions more on extensions to existing mines to improve rail lines that cross the Pilbara, plus $3 billion worth of structural, mechanical piping and electrical work on processing plants.