BHP Billiton and Vale have approved the expansion of the fourth pellet plant project at SAMARCO in Brazil with a total investment of $3.5bn to increase production capacity.

BHP will invest $1.75bn of the total amount to increase the production capacity by 8.3 million tons to 30.5Mpta.

The work will include adding additional mining capacity and a third concentrator at the Germano mine; a third slurry pipeline of about 400km in length; and a fourth pellet plant and enhanced ship loading capacity at the Ponta Ubu site.

BHP Billiton president of iron ore Ian Ashby said the investment builds on the project’s resources and operational strengths and will further improve Samarco’s competitiveness and market position.

The firm expects first pellet production to begin in the first half of 2014.