BHP wins two Canada exploration licences; assures on iron ore shipments

Australian mining giant BHP Billiton said it had won two offshore eastern Canadian exploration licences in the Orphan Basin for $625m.

The company said the bid covered the drilling and seismic work required by the project over a six-year term. BHP's minimum commitment under the licence agreements is $157m.

"This frontier opportunity has large oil resource potential which we identified through our Global Petroleum Endowment Study in 2016 and is in a low risk country, with competitive fiscal terms" said BHP petroleum products president Steve Pastor.

"This opportunity delivers on our exploration focus in conventional petroleum and will leverage our global deep-water development and operational expertise."

Initial planned capital expenditure on the exploration work programs on the two blocks is $140m up to 2021.

Meanwhile in at the company's annual meeting in Adelaide, Australia, chief executive Andrew Mackenzie said BHP would fulfil its contracts to supply iron ore, despite a massive freight train derailment in remote Western Australia disrupting exports.

BHP was forced to deliberately derail a runaway train loaded with iron ore in the Pilbara region. The incident also cut the rail link between its mines and shipping hub.