Four mainland steelmakers will buy into an iron ore mine under the agreement
Australian mining giant BHP Billiton will sell iron ore worth about US$9 billion over 25 years to four of China's leading steel mills, as the country seeks to secure supplies of crucial raw materials.
Under the deal, BHP will ship 12 million tonnes of iron ore to China a year, doubling its shipments to the country.
As part of the deal, BHP is selling a 40 per cent stake in an iron ore project in Western Australia to Wuhan Iron and Steel, Maanshan Iron & Steel, Jiangsu Shagang Group and Tangshan Iron and Steel. The four mills have paid an undisclosed upfront fee as commitment for the ore purchases. Final prices will be negotiated each year based on global market rates.
The mainland's fast-growing construction, car and shipbuilding industries are fuelling demand for steel and iron ore.
'In the steel industry, certain products lack production capacity because of supply shortages,' Wuhan Iron and Steel head Liu Binren said yesterday.