Australian miner Fortescue Metals has approved a $US8.4bn expansion of its Pilbara, Western Australia iron ore operations.

The expansion from 55Mt/y to 155Mt/y is to be financed by bank or bond market debt facilities, cash reserves and cash flow from operations.

"This decision will enable Fortescue to leverage its existing infrastructure and its massive land holding across the Pilbara to exponentially increase product sales within key markets of Asia, Europe and Australia," CEO Andrew Forrest said.

"After years of planning for the next phase of development, the depth of management experience and breadth of construction and operational expertise will enable Fortescue to rapidly achieve its growth ambitions within a sector that is underpinned by an extraordinary demand profile," Mr Forrest added.