BHP Billiton and JFE Steel to form joint venture

BHP Billiton and JFE Steel to form joint venture

According to recent news in the market, Australian BHP Billiton is planning to a form joint venture with Japanese steel company JFE Steel. The joint venture company is stated to be BHP Billiton's first iron ore joint venture with a Japanese steel producer. Under the scope of the agreement, JFE Steel will have 20% interest in a sub-lease over the part of BHP Billiton's Yandi Mine, called Western 4. The agreement covers the sale of 16 million tons of iron ore per annum from BHP Billiton's products over the next 11 years. The value of the contract is stated to be $3.7 billion. BHP will have 68% interest in the joint venture and the remaining 12% will be shared between BHP Billiton's partners ITOCHU Minerals & Energy of Australia and Mitsui Iron Ore Corporation. The two companies will have 6.4% and 5.6% stake in the joint venture respectively.