BHP Billiton is reviewing its iron ore operations in the Pilbara, in north-west Western Australia, after speculation that its costs are set to rise.

BHP has seven iron ore operations in the region but operates only one – the Mount Whaleback mine.

The other six are operated by contractors.

The review follows an announcement that BHP's contracting costs are expected to rise by 50 per cent by the end of this year.