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BHP Billiton (LON:BHP) is extending its long term joint venture relationship with Japan’s Itochu Corporation and Mitsui to develop its Jimblebar iron ore mine Australia.
Under the terms of the agreement, Itochu and Mitsui will invest approximately $800 million and $700 million respectively in shares and loans to the project.
BHP, the world’s largest miner and third largest iron ore producer, said the funds include a share of capital costs associated with the Jimblebar expansion project incurred to date and should be completed in the September quarter.
The injection represents an 8% an and 7% interest in the Jimblebar mining hub and resource which maintains the two Japanese giant’s interest in the current mine, rail and port infrastructure project at 15%.
BHP’s iron ore chief Jimmy Wilson, said the new Jimblebar mine will have initial production capacity of 35 million tonnes per year with future expansion potential.
Once fully operational this will bring BHP’s Western Australia Iron Ore’s supply chain capacity to 220 million tonnes per year on a 100% basis.
BHP’s announcement comes on the same day Fortescue Metals Group (ASX: FMG), the world’s fourth-largest iron-ore producer said it needs more time to sell a stake in its rail and port assets located in the region, which it hopes will attract as much as $3.8 billion.
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