BlueScope Steel has entered into a long-term contract with BHP Billiton and its joint venture partners for the purchase of iron ore.
Under the contract BlueScope Steel has renewed its existing annual commitment for 4.3 million tonnes per annum of lump and fines.
The company has also secured an additional 730,000 tonnes per annum of fine iron ore to support a change in ore mix once the Sinter Plant upgrade is completed in 2009.
The new contract commences in July 2009 and runs to June 2019. It secures long term supply of a key raw material.
Associated freight arrangements, that are mutually beneficial to BlueScope Steel and BHP Billiton, have also been renewed.
Pricing in the new agreement for the existing tonnes is reviewed quarterly and is tied to movements in iron ore prices paid by customers of BHP Billiton in Asia.
The additional tonnes are priced on an index basis.
Arrangements with other suppliers for the remainder of the Company’s iron ore requirements will be renegotiated at the appropriate time to ensure continuity of supply.