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BIL
BIBLT
BIL - BHP Billiton Plc - BHP Billiton And Rio Tinto Sign Binding Agreements On
Iron Ore Production Joint Venture
BHP Billiton Plc
Share code: BIL
ISIN: GB0000566504
Date 5 December 2009
BHP BILLITON AND RIO TINTO SIGN BINDING AGREEMENTS ON IRON ORE PRODUCTION JOINT
VENTURE
On 5 June 2009, BHP Billiton and Rio Tinto signed an agreement of core
principles to establish a production joint venture covering the entirety of both
companies` Western Australian iron ore assets. The companies today signed
binding agreements on the proposed JV that cover all aspects of how the joint
venture will operate and be governed.
The companies have also filed submissions with the European Commission and the
Australian Competition and Consumer Commission in relation to the proposed
production joint venture and expect to submit filings in other relevant
jurisdictions shortly. The companies understand that the European Commission
will review the production joint venture under Article 101 (formerly Article
81). Taking into account all regulatory review processes and shareholder
approvals, BHP Billiton and Rio Tinto anticipate completion of the JV in the
second half of calendar year 2010.
The production joint venture encompasses all current and future Western
Australian iron ore assets and liabilities and will be owned 50:50 by BHP
Billiton and Rio Tinto. It will deliver substantial synergies resulting from
combining the companies` Western Australian iron ore operations, with the aim of
producing more iron ore at lower cost. BHP Billiton and Rio Tinto believe the
net present value of these unique production and development synergies will be
in excess of US$10 billion (100 per cent basis). As previously outlined, these
synergies are anticipated to come from:
* Combining adjacent mines into single operations;
* Reducing costs through shorter rail hauls and more efficient allocations of
port capacity;
* Blending opportunities which will maximise product recovery and provide
further operating efficiencies;
* Optimising future growth opportunities through the development of
consolidated, larger and more capital efficient expansion projects;
Combining the management, procurement and general overhead activities into a
single entity.
BHP Billiton CEO, Marius Kloppers, said, "We are very pleased to now have formal
and binding agreements in place to develop this important joint venture. With
the history of both companies` attempts to join together these two world-class
iron ore operations in Western Australia at various times, this deal has
effectively been more than a decade in the making. It is an important milestone
towards delivering substantial additional benefits to both sets of shareholders,
and to the shareholders of our respective joint venture partners in the
Pilbara."
Tom Albanese, chief executive, Rio Tinto, said, "Signing binding agreements
brings us one step closer to unlocking the full production potential of our
Pilbara iron ore assets and achieving substantial benefits for all our
stakeholders. Completing the joint venture is a priority for Rio Tinto in 2010
and I look forward to realising this vision and capturing the synergies for our
shareholders."
On 15 October 2009, BHP Billiton and Rio Tinto announced that the partners would
not proceed with any joint venture marketing activity. This is the only material
change to the non-binding core principles agreement signed on 5 June 2009. The
production joint venture will deliver all its iron ore output to BHP Billiton
and Rio Tinto to sell independently through their own marketing groups.
For more information on BHP Billiton, go to www.bhpbilliton.com.
For further information contact:
BHP Billiton Media & Investor Rio Tinto Media & Investor Relations
Relations
Australia Australia
Samantha Evans, Media Relations David Luff, Media Relations
Tel: +61 3 9609 2898 Mobile: +61 400 Office: +61 3 9283 3620 Mobile: +61
693 915 419 850 205
email: Samantha.Evans@bhpbilliton.com
Tony Shaffer, Media Relations
Amanda Buckley, Media Relations Office: +613 9283 3612 Mobile: +1
Tel: +61 3 9609 2209 Mobile: +61 419 202 256 3667
801 349
Email: Amanda.Buckley@bhpbilliton.com Dave Skinner, Investor Relations
Office: +61 3 9283 3628
Kelly Quirke, Media Relations
Tel: +61 3 9609 2896 Mobile: +61 429 Simon Ellinor, Investor Relations
966 312 Office: +61 7 3361 4365 Mobile: +61
Email: 439 102 811
Kelly.Quirke@bhpbilliton.com
Leng Lau, Investor Relations United Kingdom
Tel: +61 3 9609 4202 Mobile: +61 403 Nick Cobban, Media Relations
533 706 Office: +44 (0) 20 8080 1305
email: Leng.Y.Lau@bhpbilliton.com Mobile: +44 (0) 7920 041 003
Christina Mills, Media Relations
United Kingdom and South Africa Office: +44 (0) 20 8080 1306 Mobile:
Andre Liebenberg, Investor Relations +44 (0) 7825 275 605
Tel: +44 20 7802 4131 Mobile: +44 Mark Shannon, Investor Relations
7920 236 974 Office: +44 20 7781 1178 Mobile: +44
email: 7917 576597
Andre.Liebenberg@bhpbilliton.com
Illtud Harri, Media Relations David Ovington, Investor Relations
Tel: +44 20 7802 4195 Mobile: +44 Office: +44 (0) 20 7781 2051
7920 237 246 Mobile: +44 (0) 7920 010 978
email: Illtud.Harri@bhpbilliton.com
United States
Jason Combes, Investor Relations
Office: +1 (0) 801 204 2919 Mobile:
+1 (0) 801 558 2645
United States Americas
Scott Espenshade, Investor Relations Tony Shaffer, Media Relations
Tel: +1 713 599 6431 Mobile: +1 713 Office: +61 (0) 3 9283 3612 Mobile:
208 8565 +1 202 256 3667
email:
Scott.Espenshade@bhpbilliton.com
Canada
Ruban Yogarajah, Media Relations Stefano Bertolli, Media Relations
Tel: US +1 713 966 2907 or UK +44 20 Office: +1 (0) 514 848 8151 Mobile:
7802 4033Mobile: UK +44 7827 082 022 +1 (0) 514 915 1800
email:
Ruban.Yogarajah@bhpbilliton.com
BHP Billiton Limited Rio Tinto Limited
ABN 49 004 028 077 120 Collins Street
Registered in Australia Melbourne 3000
Registered Office: Australia
180 Lonsdale Street T +61 (0) 3 9283 3333
Melbourne Victoria 3000 Australia F +61 (0) 3 9283 3707
Tel +61 1300 55 4757 Registered in Australia ABN 96 004
Fax +61 3 9609 3015 458 404
BHP Billiton Plc Rio Tinto plc
Registration number 3196209 2 Eastbourne Terrace
Registered in England and Wales London W2 6LG
Registered Office: United Kingdom
Neathouse Place T +44 (0) 20 7781 2000
London SW1V 1BH United Kingdom F +44 (0) 20 7781 1800
Tel +44 20 7802 4000 Fax +44 20 7802
4111 Email: questions@riotinto.com
Website: www.riotinto.com
Members of the BHP Billiton group
which is headquartered in Australia
Further information on BHP Billiton
can be found on our Internet site:
www.bhpbilliton.com
Forward looking statements
This announcement includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical facts included in this announcement, including, without
limitation, those regarding Rio Tinto and BHP Billiton`s respective financial
positions, business strategies, plans and objectives of management for future
operations (including development plans and objectives relating to the products,
production forecasts and reserve and resource positions of each of Rio Tinto and
BHP Billiton) and synergies arising out of the proposed joint venture are
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Rio Tinto or BHP Billiton, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding Rio
Tinto and BHP Billiton`s respective present and future business strategies and
the environment in which Rio Tinto and BHP Billiton, respectively, will operate
in the future. The important factors that could cause Rio Tinto and BHP
Billiton`s actual results, performance or achievements to differ materially from
those in the forward-looking statements include, among others, levels of actual
production during any period, levels of demand and market prices, the ability to
produce and transport products profitably, the impact of foreign currency
exchange rates on market prices and operating costs, operational problems,
political uncertainty and economic conditions in relevant areas of the world,
the actions of competitors, activities by governmental authorities such as
changes in taxation or regulation and such other risk factors identified in the
most recent Annual Report on Form 20-F filed with the United States Securities
and Exchange Commission (the "SEC") or Form 6-Ks furnished to the SEC by each of
Rio Tinto and BHP Billiton. Forward-looking statements should, therefore, be
construed in light of such risk factors and undue reliance should not be placed
on forward-looking statements. These forward-looking statements speak only as of
the date of this announcement. Each of Rio Tinto and BHP Billiton expressly
disclaim any obligation or undertaking (except as required by applicable law,
the UK Listing Rules, the Disclosure and Transparency Rules of the Financial
Services Authority and the Listing Rules of the Australian Securities Exchange)
to release publicly any updates or revisions to any forward-looking statement
contained herein to reflect any change in Rio Tinto and BHP Billiton`s
respective expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based.
Date: 07/12/2009 07:05:04 Produced by the JSE SENS Department.
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