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BHP Billiton and POSCO Commit to Mining Area C Feasibility Study

Melbourne and London

BHP Billiton today confirmed that Pohang Iron & Steel Co Ltd (POSCO) will participate in a feasibility study for the development and operation of an iron ore mine at Mining Area C in the central Pilbara, Western Australia.

POSCO signed a letter of intent with BHP Billiton to acquire a 20 per cent interest in a new joint venture covering the 'C Deposit' development earlier this year. POSCO's decision to participate in the feasibility study was made after undertaking a due diligence and review of BHP Billiton's pre-feasibility study.

The feasibility study is due for completion by the first quarter of 2002. The study will scope the nature of the development and determine the level of capital expenditure associated with mine construction as well as supporting rail and port infrastructure.

Subject to final statutory approvals, BHP Billiton will start work on the extraction of a 740,000 tonne bulk sample of 'Marra Mamba' iron ore from Mining Area C for trial by overseas steel mills later this month. The first shipment of the bulk sample is expected to commence in April 2002.

Full-scale mining is expected to commence in 2003 following construction of a 37-kilometre rail spur linking Mining Area C with BHP Billiton's existing railway network at the nearby Yandi mine. Mining rates are to be ramped up gradually, in line with market demand, and could potentially reach 15 million tonnes per annum.

Mining Area C contains the largest undeveloped Marra Mamba resource in the Pilbara. This resource is currently estimated at 890 million tonnes (as listed in the BHP 2000 Report to Shareholders) with significant exploration potential.

'C Deposit' is located on the northern flank of Mining Area C and contains a proven reserve of 161 million tonnes and a probable reserve of 29 million tonnes (total 189 million tonnes rounded).

Ore Reserve Statement
The information in this story 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 Billiton 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 story of the matters based on their information in the form and context in which it appears.