BHP Billiton has signed a 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 Corp.

It also announced that it had secured further long-term sales commitments for its MAC™ iron ore products with these Chinese steel mills worth around US$3.2 billion over the next 10 years.

The Chinese steel mills are:

• Wuhan Iron and Steel (Group) Corp, (Wugang)
• Maanshan Iron and Steel Co. Ltd. (Magang)
• Jiangsu Shagang Group Co. Ltd. (Shagang)
• Tangshan Iron and Steel Co. Ltd. (Tanggang)

The Wheelarra Joint Venture, announced in March this year, centers on a sub-lease over BHP Billiton’s Jimblebar mine, near Newman in Western Australia. The venture involves sales of 12 million tonnes per annum of Mt. Newman iron ore over the next 25 years.

The new sales commitments announced today are for the supply of an additional 12 million tonnes per annum of MAC™ Marra Mamba ore on top of the Mt. Newman iron ore. MAC™ ore is produced at BHP Billiton’s Area C mine, 120 km 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. “It is extremely pleasing to see that additional benefits have already started flowing to both BHP Billiton and its Chinese partners as a result of the Wheelarra Joint Venture,” he said.

“We were always confident that the agreement would underpin a strategic relationship which would grow beyond the sales contracts for the Mt Newman iron ore. This relationship will also ensure BHP Billiton maintains its share of the growing Chinese iron ore market.”

BHP Billiton has been able to consistently meet the increase in global demand for iron ore through the responsible and sustainable expansion of its business over the past eight years. Since 1994 the company has virtually doubled system capacity to 100 million tonnes per annum, with almost 40 million tonnes per annum of this growth achieved in the past two years alone.

The company also announced the Rapid Growth Project in February 2004, which will increase system capacity to 110 million tonnes per annum by the end of 2004, and is nearing completion of a Feasibility Study into the further expansion of capacity to 145 million tonnes per annum.