BHP Billiton sells stake in Pilbara mine

BHP Billiton sells stake in Pilbara mineMining sector major, BHP Billiton has said that it has sold a 15 per cent stake in the Pilbara iron ore mine in West Australian to two consortiums form Japan for about $US 1.5 billion.

Itochu will invest about $US800 million while Mitsui will spend $US700 million in shares and loans for acquiring the stake in BHP's Jimblebar mine in the Pilbara region in the state. After the transfer of stake, Itochu will hold a 8 per cent stake in the project while Mitsui will have a 7 per cent holding.

Jimmy Wilson, the head of BHP Billiton's iron ore unit, said that stake sale would improve simplicity and flexibility.

The deal is subject to an approval from the Foreign Investment Review Board in the country. The project involves mine, rail and port infrastructure works and is expected to be finalised in September. The mine is expected to have an initial production capacity of 35 million tonnes per annum, which will be increased to 220 million tonnes per annum.

"We value a 15 per cent stake in the mine at $US1.46 billion and therefore this deal represents fair value. But importantly is an additional injection of cash at a time when spending has been exceeding generation," the company said.




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