Australian mining company BC Iron said it plans to expand its iron ore production targets by 80% to 4.5 million tonnes per annum from the start of 2014.
The capacity expansion is a result of the company's recent acquisition of a 25% stake in the Nullagine Iron Ore Joint Venture (NJV) with Fortescue Metals Group, bringing its holding to 75% in the quarter ending December 2012.
The Nullagine project is located in the East Pilbara region of Western Australia and hosts mineral ore reserves of 39.9 million tonnes at 57.1% Fe.
The agreement with Fortescue, valued at A$190m ($198.54m), enhances NJV infrastructure capacity to a production rate of six million tonnes per annum for the life of the joint venture.
BC iron's annual iron ore exports have now increased by 80% from 2.5 million tonnes to 4.5 million tonnes.
"Fortescue and BC Iron will continue to explore other joint opportunities in the East Pilbara region with a view to further expanding on this strong joint venture relationship," the company said in a statement.
The firm produced 1.09 million tonnes of iron ore for the December quarter at an operating cost of $51 a tonne.
Underlying C1 costs for FY2013 are expected to comply with the company's existing projection of $45 to $50 a tonne over the life of the Nullagine JV.
Image: Iron ore arriving at Port Hedland, Western Australia. Credit: Nachoman-au.