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BHPBill signs Wheelarra JV and USD3.2bn contracts
BHP Billiton today announced the signing of the formal agreement for the Wheelarra Joint Venture with four of China`s leading steel mills and its existing Japanese joint venture partners, ITOCHU Minerals & Energy of Australia and Mitsui Iron Ore Corporation. It also announced that it had secured further long-term sales commitments for its MACTM iron ore products with these Chinese steel mills worth around USD3.2bn over the next 10 years.
The Chinese steel mills are:
- Wuhan Iron and Steel (Group) Corporation, (`WUGANG`)
- Maanshan Iron and Steel Company Ltd (`MAGANG`)
- Jiangsu Shagang Group Co Ltd (`SHAGANG`)
- Tangshan Iron and Steel Co Ltd (`TANGGANG`)
The Wheelara Joint Venture, announced in March this year, centred on a sub-lease over BHP Billiton`s Jimblebar mine, near Newman in Western Australia and involved sales of 12 million tonnes per annum (Mtpa) of Mt. Newman iron ore over the next 25 years.
The new sales commitments announced today are for the supply of an additional 12Mtpa of MAC Marra Mamba ore on top of the Mt. Newman iron ore. MAC ore is produced at BHP Billiton`s Area C mine, 120km north of Newman, which opened in October 2003. President BHP Billiton Iron Ore Graeme Hunt said the doubling of sales and purchase commitments reflects the value of the strategic relationships BHP Billiton has developed with the Chinese steel mills.
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BHP to increase coal production capacity
BHP Billiton today (01 September 2004) announced its intention to increase metallurgical coal production capacity to around 100 million tonnes per annum by 2010. The increase in capacity will be achieved through high value incremental expansions of the BHP Billiton Mitsubishi Alliance (BMA) and BHP Mitsui Coal Pty Ltd (BMC) coal operations in Queensland, Australia and potential new developments such as the Maruwai prospect in Kalimantan. Options for expanding BHP Billiton`s Illawarra coal business in New South Wales, Australia are also under consideration.
Group president Carbon Steel Materials, Bob Kirkby said the change in the rate of growth in the global steel industry in recent years had created a significant increase in demand for steel making raw materials, including seaborne metallurgical coal.
In March this year BHP Billiton outlined plans to increase capacity at the Queensland coal operations from 52Mtpa to 57Mtpa by mid 2005. This project included the purchase of additional mining equipment at several mines, upgrades to the coal preparation plants at the Saraji and Peak Downs mines and the awarding of 132 million bank cubic metres (Mbcm) of overburden stripping contracts. Mr Kirkby said the next stage of the Queensland coal expansion program had also been approved as part of the overall growth strategy. The program will increase production capacity to 59Mtpa by the second half of 2006. Capital expenditure for this next stage is expected to be USD175 million (BHP Billiton share USD87.5 million) and includes increasing throughput capacity at the Hay Point Coal Terminal from 34Mtpa to 40Mtpa and the acquisition of additional stripping equipment and mining equipment. In order to facilitate the increased production, 32Mbcm of overburden stripping contracts will be let at the Saraji mine.
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