BHP Billiton is mulling to acquire Brazilian iron ore producer Ferrous Resources as the Anglo-Australian miner seizes opportunities to scout for low-priced commodities projects brought by the pressing current low valuations of iron ore markets.

According to London's Sunday Times on Sunday, BHP Billiton reportedly had started negotiations to buy the Brazilian miner for $3.1 billion.

BHP Billiton's interest in Ferrous Resources came after the latter posted itself in the market as available for acquisition after hiring Deutsche Bank to facilitate scouting a buyer for Ferrous Resources.

In 2010, Ferrous Resources failed to make a successful entry when it attempted to list its shares in London, the Financial Times said. The company sought to raise some $400 million to fund an iron ore mine project for 2013.

Ferrous is an iron ore developer of export iron ore in Brazil's Minas Gerais state.

BHP Billiton, along with Brazil's Vale, is poised to work on $3.5 billion expansion of their jointly owned Samarco iron ore pellets project in the country.

BHP Billiton saw buying opportunities after the tightening of credit markets pushed most new mining companies to close.

Earlier, BHP Billiton reported net profits of $23.6 billion in its last financial year to June 2011, an 85 per cent jump from 2010.

Just recently, BHP Biliton acquired US-based natural gas producer Petrohawk Energy at $15.1 billion, including debt.

BHP Biliton had announced it had earmarked some $80 billion to expand existing operations over the next five years.

This included the $30-billion worth Olympic Dam copper and uranium mine. BHP Biliton is also planning to increase output of its Pilbara mine from 155 million tonnes a year to 240 million tonnes.

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