BHP & Mitsubishi Equalise Met
BHP Limited
28 March 2001
Release Time IMMEDIATE
Date 28 March 2001
Number 29/01
BHP AND MITSUBISHI EQUALISE QUEENSLAND METALLURGICAL COAL INTERESTS
BHP Limited (BHP) and Mitsubishi Development Pty. Ltd. (Mitsubishi) today
announced an agreement to move to equal ownership of their interests in the
Central Queensland Coal Associates (CQCA) and Gregory Joint Ventures (JVs).
This equalisation is a further step in the metallurgical coal strategic
alliance (the Alliance) BHP and Mitsubishi announced at the time of launching
the acquisition of QCT Resources Ltd (QRL) last year and follows the
successful conclusion of this acquisition and the subsequent announcement of
plans to integrate the CQCA Blackwater mine with the QRL South Blackwater
mine.
The agreement will result in a transfer of 18.285% of the CQCA JV and 30.325%
of the Gregory JV from BHP to Mitsubishi for A$1.005 billion.
BHP and Mitsubishi will have joint operational control of the CQCA and Gregory
JV assets and will jointly market the coal produced. Details of the transition
of ownership interests are attached.
New operational and marketing arrangements will reflect the equalised
ownership. A jointly owned operations management company will be established
to contract with BHP Coal to provide a full range of services associated with
the operation of the Bowen Basin coal mines and Hay Point coal terminal. A
jointly owned marketing company will act as the marketing agent for the
Alliance. The Alliance will continue to benefit from strong involvement with
BHP's global operations and business services network.
No change to employment levels is expected in the Queensland coal operations
as a result of this transaction, beyond those announced last year for the
closure of the South Blackwater underground mines. The operational workforce
will continue to be employed by BHP.
BHP Managing Director and CEO Paul Anderson said: 'We are actively managing
our asset portfolio and looking for opportunities to extract greater value
from our current businesses. This transaction, related developments over the
last 6 months, and the expected benefits of the Alliance, represent an
outstanding outcome for shareholders.
'The QRL acquisition allowed us to rationalise production and capture
synergies that were otherwise not available by simplifying our joint venture
structures and ownership arrangements. This equalisation of interests with
Mitsubishi leaves two strong partners with fully aligned interests running the
world's best metallurgical coal business. This will enhance our capacity to
pursue opportunities and further strengthen the Queensland coal industry.
'This 50 per cent interest in the CQCA and Gregory operations is a world class
investment for BHP. Mitsubishi's now equal involvement will add significantly
to the value of our joint business by extending our market presence and
enhancing our performance in meeting the needs of customers.'
BHP's equity in the CQCA JV will move to50% (from 52.1% prior to the QRL
acquisition) and to 50% (from 64.14%) in the Gregory JV.
In welcoming the agreement, Mr Kenjiro Itadani, Managing Director of
Mitsubishi, said: 'Mitsubishi is proud of its involvement in the Australian
coal industry over the past 30 years. We were one of the founding CQCA
partners, and have continued to meet all of our commitments to the ongoing
development of the Bowen Basin export coal industry.
'Investment in high quality resources is a core strategic objective for
Mitsubishi. Our significant level of new investments, including the $130
million commitment to the Blackwater/South Blackwater open cut expansion,
clearly demonstrates our confidence in the long term future of these assets,
which are our only global metallurgical coal investment.
'The Alliance was established because we have a common vision for what is
required to secure the competitiveness of our metallurgical coal business. We
believe that by combining our complementary operational and marketing
strengths, we will be able to more effectively achieve our joint and
individual objectives.
'We recognize the considerable value BHP has added through its management of
our Bowen Basin assets and we are pleased that BHP will continue to play a
leading role in operations.'
These new equity arrangements will not affect BHP's interests in the
operations at the Riverside and South Walker Creek mines, nor in the Illawarra
mines in NSW.
BHP and Mitsubishi are working to conclude the transaction by 30 June 2001
subject to regulatory approvals.
For further information please contact:
BHP Mitsubishi
Mandy Frostick Robert Campese
Manager Media Relations Manager General Affairs
Phone: 61 3 9609 4157 Mobile: 61 419 546 245 Phone: 61 2 9951 4833
Dr Robert Porter
Vice President Investor Relations
Phone: 61 3 9609 3540 Mobile: 61 419 587 456
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