BHP Billiton and Rio Tinto have signed a joint venture agreement for iron ore exploration across both companies’ Western Australian assets in Pilbara.
BHP Billiton says both companies have filed submissions with the European Commission and the Australian Competition and Consumer Commission in relation to the proposed production joint venture and expect to submit filings in other relevant jurisdictions shortly.
BHP Billiton and Rio Tinto believe the net present value and the development synergies will exceed US$10 billion.
According to BHP Billiton, the synergies are anticipated to come from number of opportunities including reducing costs through shorter rail hauls and more efficient allocations of port capacity.
“With the history of both companies' attempts to join together these two world-class iron ore operations in Western Australia at various times, this deal has effectively been more than a decade in the making,” BHP Billiton CEO Marius Kloppers says.
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