BHP Billiton signs an iron ore contract with China
According to recent news in the market, Australian mill
BHP Billiton has recently signed an
iron ore contract with four Chinese steel mills, which also includes establishment of Wheelarra Joint Venture. The Chinese mills involved in the contract are namely, Wuhan Iron and Steel Corp, Maanshan Iron and Steel Company Ltd, Jiangsu
Shagang Group Co Ltd and Tangshan Iron and Steel Co Ltd. In line with the agreement,
BHP Billiton will sell 12 million tons of
iron ore to Chinese mills per annum.
The
iron ore sales of
BHP Billiton to Chinese mills over the next 25 years are expected to be worth $9 billion, which makes the deal the largest commercial agreement of
BHP Billiton with the Chinese mills.
According to the agreement, Chinese mills will have 40% share in Jimblebar mine of
BHP Billiton.
BHP Billiton will hold 51% stake and the rest of the stake will be shared between
BHP Billiton and its Japanese partners CI Minerals
Australia and Mitsui
Iron Ore Corp, with the rates of 4.8% and 4.2% respectively.
Moreover, it is reported that the shipment of
iron ore by
BHP Billiton will commence in a very short time.
The deal is also expected to form the basis of a new export agreement, which will be signed between
Australia and
China.