BHP to Spend $240 million on Tugs, Harbor

BHP Billiton said on Tuesday it will spend $240 million upgrading its marine iron ore facilities in Western Australia.

The funds will be used to purchase six tug boats and build a new tug harbor in the Port Hedland Port, with construction due to be completed in the September 2016 quarter.

BHP is expected to show it shipped a record 250 million tons of iron ore through the port in fiscal year 2015 when it releases its year-end operations report on Wednesday.

"This project will enable BHP Billiton to safely meet projected demand for tug services and effectively manage shipping risk for all users of the Port Hedland Port," BHP iron ore division head Jimmy Wilson said in a statement.

The new tug harbor improves upon previous designs with the facility requiring minimal dredging and marine-based infrastructure and having less environmental and visual impact.

The investment will also include the upgrade of workshop facilities, operational and service berths and two small boat moorings at the existing Nelson Point Tug Harbour.

Earthworks are scheduled to commence in the December 2015 quarter and the project is expected to create up to 200 jobs in Port Hedland during construction.

Port Hedland, which is also used by iron ore miner Fortescue Metals Group, shipped a record 446.9 million tons of cargo in the 12 months to June 30, port data shows.

Iron ore exports for the year climbed to 439.6 million tons, up by 75.2 million tons from the previous year.