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.