Australia's leading steelmaker BlueScope Steel has announced the signing of a ten-year long-term contract with Australian miner BHP Billiton and its JV partners for the purchase of iron ore.
Under the contract, BlueScope Steel has not only renewed its existing annual commitment for 4.3 million mt of lump and fines but also has secured an additional 730,000 mt per annum of fine iron ore to support a change in ore mix once the mill's sinter plant modernization is completed next year.
The new contract will be effective for the period between July 2009 and June 2019. Associated freight arrangements, that are mutually beneficial to BlueScope Steel and BHP Billiton, have also been renewed.
Blue Scope stated that pricing in the new agreement for the existing tonnage is reviewed quarterly and is tied to movements in iron ore prices paid by customers of BHP Billiton in Asia and added that the additional tonnage is priced on an index basis.
In order to secure continuous supplies, the company expects to renegotiate with the other iron ore suppliers to satisfy the remainder of the mill's requirements for this key raw material.