SYDNEY May 9 (Reuters) - Western Australia, which houses the iron ore-rich Pilbara region, said it will start compulsory acquisition of land to build a new deepwater port in anticipation the state's exports of the raw material will nearly double by 2020.

Miners, including BHP Billiton and Rio Tinto , are spending billions of dollars to boost their iron ore output, convinced top market China's modernisation bid will sustain demand over the long term.

The proposed Anketell port, located near the Cape Lambert port used exclusively by miner Rio Tinto to ship ore, will be developed in stages as a multi-user terminal, with an ultimate annual export capacity of more than 350 million tonnes, according to a statement issued by Western Australia state premier Colin Barnett on Wednesday.

Ports in the state's Pilbara iron belt - the world's biggest single source of iron ore - are at near full capacity or off limits to a legion of new mining companies sprouting up in the region, leaving little choice but to build a new one.

Annual iron ore exports from the Pilbara totaled 452 million tonnes last year, representing nearly half of all the globally traded ore, and are forecast to climb to 900 million tonnes by 2020, according to government estimates.

Aquila Resources and Fortescue Metals Group each want to take over construction of the Anketell port once the land is acquired to meet the needs of new mines both firms are digging in the Pilbara region.

The Western Australian state government, which stands to reap hundreds of millions of dollars in mining royalties once the port is built, has the final say on who conducts the work.

If selected for the construction, Aquila has said it would move quickly to bring the port into operation, while Fortescue has called for a slower development in stages so it has more time to dig new mines.

Rio Tinto is already expanding its own ports at Cape Lambert and nearby in Dampier ahead of a surge in its iron ore shipments, which could see tonnages rise to as high as 353 million tonnes by 2016 from 230 million tonnes now.

BHP Billiton is also studying a plan for an outer harbour development to increase shipping capacity at the Port Hedland terminal, which it shares with Fortescue and Atlas Iron .

Total iron shipments from Port Hedland climbed to 20.7 million tonnes in April from 18.66 million tonnes in March.

Construction of the Anketell port and shipping corridors will require the acquisition of 4,300 hectares of land, according to the government statement.

No projection of the development cost was given, though analysts estimate it could run as high as $3 billion.

The land identified for the project is covered by various forms of tenure, including native title, pastoral leasehold, private land and mining tenements, the statement said, adding landholders would be compensated where required.