Rio Tinto, BHP Sign Non-Binding Agreement On Iron Ore JV
June 04 2009 - 8:52PM
Dow Jones News
Rio Tinto Ltd. (RTP) said Friday it has a non-binding agreement
with BHP Billiton Ltd. (BHP.AU) on a joint venture of their iron
ore operations in the Pilbara region of Western Australia.
Rio said the 50/50 joint venture will unlock significant value,
with net present value of synergies to be more than US$10 billion
as adjacent mines are combined into single operations, rail haulage
is made more efficient and future growth is optimized.
The deal will see BHP pay Rio US$5.8 billion to equalize their
stakes in the joint venture and take BHP's stake 50% from 45%.
"The joint venture will establish an unrivaled iron ore business
with world class assets and infrastructure," Rio Chairman Jan du
Plessis said in a statement.
-By Alex Wilson, Dow Jones Newswires; 61-3-9292-2094;
alex.wilson@dowjones.com