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BlueScope Steel Concludes Major Iron Ore Contract with BHP Billiton
09/19/2008 - BlueScope Steel enters into a new long-term iron ore supply contract with BHP Billiton and its joint venture partners.
BlueScope Steel has entered into a new long-term contract with BHP Billiton and its joint venture partners for the purchase of iron ore.
In addition to renewing its existing annual commitment for 4.3 million tonnes per annum of lump and fines, the new contract also allowed BlueScope Steel to secure an additional 730,000 tonnes per annum of fine iron ore. The additional volume of fine iron ore will help to support a change in ore mix once the company completes its Sinter Plant upgrade in 2009.
In the new agreement, pricing for the existing tonnes is reviewed quarterly and is tied to movements in iron ore prices paid by customers of BHP Billiton in Asia. The additional tonnes will be priced on an index basis. The basis of pricing under the new contract is expected to maintain BlueScope Steel’s competitive position in the industry.
The new contract commences in July 2009 and runs to June 2019. Associated, mutually beneficial freight arrangements have also been renewed.
The company said that it will renegotiate its arrangements with other suppliers for the remainder of its iron ore requirements at the appropriate time to ensure continuity of supply.
