In its steelmaking materials briefing yesterday, BHP coal business president Dave Murray told journalists the booming coal market “hadn’t even started yet” and there was plenty still to come.

The briefing, which gave an overview of BHP’s steelmaking commodities business, announced an increase in its iron ore reserves whilst remaining a leader in the coal sector.

Murray identified new coking coal supply basins, including Mozambique, Mongolia and Russia, but said that as new supply regions they all shared the same challenges with rail and supporting infrastructure.

“So such developments come with a large price tag and a long lead time so it is likely that the current supply regions will need to continue to expand rapidly to meet global demand,” Murray said.

He recognised that supply out of Queensland’s Bowen Basin had been constrained but said plans were in place to expand infrastructure.

“Ongoing infrastructure constraints and the inability to bring it on quick enough [means] in the near future the market will remain tight,” he said.

Murray was enthusiastic about BHP’s seaborne metallurgical coal market and said it had growth options which were head and shoulders above its competitors, with a footprint in two premier basins and a third one to follow.

This week BHP announced it would spend $US100 million developing its interests in the Maruwai metallurgical coal basin in Indonesia which will start production at 1 million tonnes next year.

Despite constrained infrastructure out of Australia, BHP said its competitive advantage lay in its geographic location.

“We are very well positioned if you look at the key growth markets areas in the Asia-Pacific region,” Murray said yesterday.

He said the key advantage was BHP’s ability to operate reliably – BMA’s wholly owned Hay Point terminal allows it to control product flow to customers with 70% of its coal going through the port.

BHP said it had some of the lowest-cost operations in the world together with high-quality coking coal which would generate high-margin outcomes.

Murray said he did not believe any other producer could boast such a “deep portfolio of large long-life quality of assets”

He used the example of Peak Downs and Goonyella as large operations which had sufficient rail and resources to continue to mine for decades and was quick to point out the asset had not been even fully explored yet.

The Bowen Basin floods were touched upon as events which had impacted “quite severely” on the BMA and BMC operations in Queensland.

Murray said recovery operations were well advanced and the mines were 90% recovered but it would take some time to get the mines’ production elements back into sequence and to rebuild stocks in the pit, processing plants and at the port.

He said the company's Illawarra mines had performed well with a "great year", despite the company's decision two years ago to minimise disruption to the community by modifying its underground mine plans.

“We can report record production and shipment at Illawarra but it is not entirely out of the woods,” Murray said.

“There are still some difficult sections to mine through.”

Over the next few years BHP plans to grow the business through incremental operational improvements, including capital efficiency add-ons, more longwall panels, increased efficiency in underground coal clearance systems and capital spent on washing facilities.