JFE Western 4 Joint Venture Announcement Media Backgrounder (129.48 KB)
BHP Billiton today announced the signing of the JFE Western 4 Joint Venture with JFE Steel and its existing Yandi joint venture partners, ITOCHU Minerals & Energy of Australia and Mitsui Iron Ore Corporation, which will secure long-term sales contracts worth approximately US$4.3 billion.
The JFE Western 4 joint venture involves a sub-lease over the Western 4 deposit within BHP Billiton’s Yandi mine in Western Australia’s Pilbara region and involved sales of approximately 16 million wet tonnes per annum (Mtpa) over the next 11 years.
The joint venture involves the joint technical development and commercialisation of 169 million tonnes of Lower Channel Iron deposit (LCID) pisolite iron ore at the Yandi mine, which has not previously been used in the steel-making process. Development of this material will also extend the life of the Yandi mine.
Under the joint venture, JFE Steel will take a 20 per cent interest in the sub lease. BHP Billiton will retain a 68 per cent interest, with Japanese joint venture partners ITOCHU Minerals & Energy of Australia and Mitsui Iron Ore Corporation retaining 6.4 per cent and 5.6 per cent interests respectively.
The June 2004 Ore Reserve for Western 4 is shown below:
Yandi Western 4 Channel Iron Deposit (CID) Ore Reserve Statement June 2004 at a 56% Fe cut-off.
wMt* Fe P
Proved 46 57.3 0.041
Probable 63 57.3 0.044
Total 109 57.3 0.043
* wMt represents wet millions of tonnes, which is based on a moisture content of 8%.
Since reporting Ore Reserves in June 2004 the open pit design and mine plan for Yandi Western 4 has changed and the mine plan includes an additional 6 wMt of inferred resource (Fe 57.3 and P 0.030 at a 56% Fe cut-off).
BHP Billiton President and Chief Operating Officer Western Australia Iron Ore Ian Ashby said the additional sales and purchase commitments reflect the value of the strategic relationships BHP Billiton has developed with the Japanese steel mills.
“Our Japanese customers provided the basis for BHP Billiton’s investment in the Pilbara during the 1960s through joint ventures, which were essential to mitigate the risk of the large capital outlays required to develop the vast iron ore resources,” he said.
“Since those early days, BHP Billiton has continued to build a strategic relationship with the Japanese steel mills, which has led to the development of the new generation of Pilbara ores, including the Yandi ‘Pisolite’ resources in 1991.
“Market acceptance of Yandi’s Pisolite is a direct result of testing undertaken by BHP Billiton and the Japanese steel mills in the late 1980s when there was a negative view that Pisolite iron ore was unsuitable for steel making.
“Since the first commercial shipment of Yandi ore in 1992, production has increased every year to more than 40Mtpa. This latest joint venture will help ensure BHP Billiton maintains its share of the growing iron ore market.”
The information in this press release that relates to Ore Reserves is based on information compiled by Mr Greg Carroll, Manager Resource Planning, who is a full time employee of BHP Billiton Iron Ore and a member of the Australasian Institute of Mining and Metallurgy. Mr Carroll has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Carroll consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.