ITOCHU and Mitsui Approve Pre-Commitment Funding
OREANDA-NEWS. February 3, 2012. ITOCHU Corporation (head office: Minato-ku, Tokyo; President: Masahiro OKAFUJI; hereinafter ITOCHU) and Mitsui & Co., Ltd. (head office: Chiyoda-ku, Tokyo; President & CEO: Masami IIJIMA; hereinafter Mitsui) announced today that they have approved the pre-commitment funding for the outer harbour facility associated with the Western Australia iron ore operations, which are run as joint ventures with leading mining company, BHP Billiton (Australia & UK).
The pre-commitment funding totals USD 917 million with the ITOCHU and Mitsui share at approximately USD 138 million (10.6 billion yen; ITOCHU at 5.7 billion yen and Mitsui at 4.9 billion yen).
This decision is in relation to the expansion project to increase the installed port capacity by 100 million tons per year, through the construction of outer harbour shipment facilities at Port Hedland and landside infrastructures including stockyards and a rail spur. The pre-commitment funding will enable the progress of feasibility studies and the procurement of long lead-time items, and will allow dredging to begin subject to necessary regulatory approvals. In parallel with this work, engineering studies are underway to match mine and rail expansions to the expanded port capacity.
The project is expected to be reviewed for full approval in the fourth quarter of calendar year 2012 and start-up is expected in the first half of calendar year 2016. This project has an embedded option to expand by another 100 million tons per year.
ITOCHU and Mitsui, together with BHP Billiton, own the three iron ore joint ventures of Mt. Newman, Yandi, and Mt. Goldsworthy in Western Australia (BHP Billiton holds an 85% share, ITOCHU 8%, Mitsui 7%). Shipments totaling approximately 162 million tons were made in calendar year 2011 by the three joint ventures, primarily to Asia.
ITOCHU and Mitsui will seek to increase the iron ore supply capacity through the Western Australia iron ore operations, in response to the expected increase in demand worldwide over the medium and long terms.