By Matt Chambers

April 23, 2017 - BHP Billiton has made its first sizeable coking coal investment approval in years, approving a $US200 million ($265m) investment in a conveyor belt linking its Peak Downs mine to its Caval Ridge processing plant in Queensland, Australia's Bowen Basin.

While tiny by BHP standards, the move will boost production by two million tonnes of coal a year and reduce the cost of another two million tonnes that is currently being trucked between the two mines.

The investment will mean the full 10 million tonnes of annual capacity at the Caval Ridge coal handling and processing plant is used. It will create up to 400 ­construction jobs, 100 new operational roles and make permanent another 100 jobs currently trucking coal from Peak Downs that now rely on healthy coal prices for them to continue.

The low-cost expansion comes as coking coal prices soar in the wake of Cyclone Debbie. But BHP says this has had no impact on the decision.

“We do expect that, over time, prices will come back from the spike we’ve seen, but coking coal is a non-substitutable commodity,” BHP’s head of Australian mining Mike Henry said.

BHP coking coal boss Ragg Udd said the investment would be profitable at all stages through the coal cycle.

Cyclone Debbie caused landslides on the Goonyella line, on which about half Queensland’s coking coal is hauled.

BHP’s head of Australian mining Mike Henry. 

Picture by Aaron Francis