BHP acquires HWE’s Pilbara business

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BHP Billiton has finalised the acquisition of the Leighton Holdings HWE Mining iron ore business in WA’s Pilbara.

The announcement is consistent with BHP’s intention to move its WA iron ore business from contractor mining to owner-operator mining.

It follows the signing of the Heads of Agreement between the companies on the 9th August.

The August signing represented Leighton’s agreement to sell its HWE mining subsidiaries, which provide contract services to BHP, for $705 million.

BHP’s acquisition involves about $400 million of mining equipment and related assets that service the Area C, Yandi, and Orebody 23/25 operations.

The three operations account for almost 70 per cent of WA’s total iron ore movement and rake in around $1.1 billion annual revenue.

The deal also involves the transfer of approximately 2600 people to BHP Billiton Iron Ore.

In an e-mail to BHP workers obtained by Mining Australia, BHP iron ore president Ian Ashby said while the deal was significant, there would be little noticeable change to company’s operations.

“On the ground expect to see very little change – we want to ensure everyone maintains their ‘operating as usual’ focus to achieve a seamless transition for all employees,” he said.

“While some integration planning work has commenced, this may take some time to finalise.

“Certainly it is our desire to have most of the integration related activities completed within the first 100 days after Day 1.”

Subject to the relevant internal and regulatory approvals, the transaction is expected to close during the fourth quarter of 2011.

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