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Contract Awarded for Mining Area C Bulk Sample

BHP Billiton today announced that it had awarded Macmahon Contractors the contract to extract a 740,000 tonne bulk sample of 'Marra Mamba' iron ore from its Mining Area C resource, 120 kilometres north of Newman in Western Australia.

The sample will be trialed by customers and marks a significant milestone in the current feasibility study, which is examining development of the Mining Area C project.

Macmahon's will employ about 120 people at Mining Area C to extract and transport the sample to BHP Billiton's existing Orebody 25 mine, near Newman, for railing to Port Hedland for final processing and shipment.

They have sub-contracted Gulf Transport, ECS Gumala and NRW Contracting to assist with the Project. Subject to final statutory approvals, work on the extraction will start in September and shipments to customers are expected to commence in April 2002.

Macmahon's have agreed to a minimum five per cent indigenous employment, with a target of 10 per cent, as part of the contract. BHP Billiton's native title agreements with Innawonga Bunjima Niapaili, Martu Idja Banyjima and Nyiyarparli include a commitment to considering opportunities for indigenous employment and contract work.

President Western Australian Iron Ore and HBI Graeme Hunt said BHP Billiton planned to include similar conditions in other major contracts in the future to help it increase its current indigenous employment levels from three per cent to 12 per cent over the next 10 years.

Mr Hunt said that the delivery of such a large bulk sample will allow a large number of customers to trial the new MAC™ lump and fines in their steel making blends.

"Laboratory testing at BHP Billiton's Minerals Technology research laboratories in Newcastle, New South Wales, have already shown MAC™ lump to be suitable for direct blast furnace iron making feed and MAC™ fines for sintering - agglomeration of fines before charging to the blast furnace," he said.

"Our technical people will now work closely with our customers to validate these findings in full scale trials which we are confident will demonstrate the value of MAC™ lump and fines to the next generation of iron and steel production."

The bulk sample will be drawn from a 189 million tonne resource at 'C Deposit' ('C Deposit' contains a proven reserve of 161 million tonnes and a probable reserve of 29 million tonnes - total 189 million tonnes rounded), where BHP Billiton is well advanced in feasibility studies for the development of a 15mtpa mine in early 2003. Mining Area C has total iron ore reserves in excess of 890 million tonnes divided into separate sections known as A through to F and R over a strike length of 20 kilometres.

In the year ending June, 2001, BHP Billiton shipped a record 67.2 million dry metric tonnes (71.3 million wet metric tonnes). Ore produced for railing was 64.2 mdmt comprising 27.1mdmt from Newman, 28.2 mdmt from Yandi and 8.9mdmt from Yarrie.

Ore Reserve Statement
The information in this report that relates to Mineral Resources and Ore Reserves is based on information compiled by M. Kneeshaw (resources) and P. Schultz (reserves) who are employees of BHP and who are a Fellow and Member respectively of The Australasian Institute of Mining and Metallurgy.

M Kneeshaw and P Shultz have sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which they are undertaking to qualify as a Competent Person as defined in the 1999 Edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves".

M Kneeshaw and P Shultz consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.