World number one resources group BHP Billiton on Monday announced its intention to enter into the Wheelarra joint venture with four of China’s leading steel mills. The joint venture will secure the sale to the mills of about 12-million tons per annum of iron ore.
The joint venture will be BHP Billiton’s largest ever commercial agreement with Chinese steel mills, with sales of iron ore expected to total $9-billion over the next 25 years.
The steel mills are: Wuhan Iron and Steel Corporation, Maanshan Iron and Steel Company, Jiangsu Shagang Group as well as Tangshan Iron and Steel. Under the joint venture, the Chinese steel mills will take a 40% interest in a sub-lease over BHP Billiton’s Jimblebar mine, near Newman in Western Australia.
BHP Billiton will retain a 51% interest, with Japanese joint venture partners CI Minerals Australia and Mitsui Iron Ore Corporation taking a 4,8% and 4,2% interest respectively.
BHP Billiton CEO Chip Goodyear said the company was pleased to be part of a unique venture that would see, for the first time, a partnership with a group of Chinese steel makers to ensure a stable, long-term supply of iron ore to their own operations.
“The Wheelarra joint venture will underpin a major export agreement between Australia and China and will cement an ongoing economic partnership between BHP Billiton as a leading supplier of raw materials and China as a major industrial nation,” he said.
“We expect the relationship between China and BHP Billiton will provide further opportunities for our other businesses, notably metallurgical coal and manganese,” Goodyear said.
The Wheelarra joint venture agreement is expected to be formalised in Australia soon. – I-Net Bridge