Baosteel is a leading steelmaker in China.
The partners are Itochu Minerals & Energy of Australia Pty Ltd, Mitsui-Itochu Iron Pty Ltd, Mitsui Iron Ore Corporation Pty Ltd. BHP Billiton's share is 85 percent.
With this new contract, Baosteel will be supplied with 10-million tonnes of iron ore each year for 10 years at a price to be mutually agreed each year. The first shipment under the new contract is scheduled for April 2008.
BHP Billiton President Marketing, Tom Schutte, said the agreement underlined BHP Billiton's long-term commitment to Baosteel.
"Baosteel plays a significant role in China's steel making industry. We are absolutely delighted to be able to support Baosteel's future development by guaranteeing a stable and predictable supply of iron ore.
"This is a significant quantity of iron ore and highlights our interest in keeping pace with high demand in China during a time when supply is tight. We are doing this through substantial investment in the expansion of our mine, rail and port operations in Western Australia, with planned installed production capacity of 300-million tonnes per annum by 2015," he said.
"Optimism about the long-term prospects for the steel industry"Baosteel Vice President, Dai Zhihao said: "We are pleased to enter into this iron ore supply contract with BHP Billiton. This will enhance the long-term cooperation between Baosteel and BHP Billiton based on mutual interest. The new supply highlights our optimism about the long-term prospects for the steel industry in China."
The additional supply is in line with the growth of BHP Billiton's iron ore production. It is the result of extensive planning and discussions between the two companies over the past two years.
BHP Billiton has been a long time partner to Baosteel through the supply of its full suite of carbon steel materials products, including iron ore, manganese and coking coal. It also supplies nickel for Baosteel's expanding stainless steel production. BHP Billiton and Baosteel also entered into an agreement in 2005 that focuses on technical research in iron ore and steel making raw materials.