Anglo-Australian giant
The 25-year deal is BHP’s largest-ever commercial agreement with Chinese steel mills.
Under the Wheelarra joint venture, Wuhan Iron & Steel, Maanshan Iron & Steel, the Jiangsu Shagang Group, and Tangshan Iron & Steel will take a 40% interest in a sub-lease over BHP Billiton’s Jimblebar mine, near Newman in Western Australia. BHP will retain a 51% stake, with its long-standing Japanese joint venture partners, CI Minerals Australia and Mitsui Iron Ore, taking 4.8% and 4.2%, respectively.
During the six months ended Dec. 31, 2003, Jimblebar produced 3.1 million tonnes of iron ore, up from 2.6 million tonnes at the end of 2002. The operation is targeting the Wheelarra Hill 4 deposit. The ore is blended with ore from the Mount Whaleback and satellite orebodies to produce the Mount Newman blend.
At the end of June 2003, Jimblebar’s proven and probable reserves stood at 247 million tonnes grading 61.8% iron, with 175 million of those tonnes (running 62% iron) in the proven category.
BHP will immediately begin shipping an additional 4-6 million tonnes of iron ore to the mills, roughly doubling its total sales to its Chinese customers in 2004.
“The Wheelarra joint venture will underpin a major export agreement between China and Australia, and cement an ongoing economic partnership between BHP Billiton, as a leading supplier of raw materials, and China, as a major industrial nation,” says BHP CEO Chip Goodyear.
BHP Billiton, the world’s largest diversified miner, made a profit of US$1.34 billion in the second half of 2003, up from US$912 million in the last six months of the previous year. Overall sales increased 36.2% to US$11 billion, and sales to China amounted to 10% of BHP’s total turnover, compared with 5% a year earlier.
The major’s iron ore production in Western Australian amounted to a record 44.9 million tonnes in 2003, with shipments hitting a record 44 million tonnes, driven by strong demand in all Asian markets.
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