RIO Rio Tinto Plc

RNS Number:4435X
Rio Tinto PLC
07 April 2004

Rio Tinto strengthens links with Japanese partners



Building on its strong relationship developed since becoming manager of the Robe
River Joint Venture (Robe) in 2000, Rio Tinto has reached agreement with its
Japanese partners on a number of iron ore and coking coal initiatives.



The initiatives include a contract to supply about 150 million tonnes of iron
ore to Nippon Steel over 20 years or more, an expansion study for the Hail Creek
coking coal mine, the transfer of a 47 per cent interest in the Beasley River
iron ore deposit, and various technical exchange programmes.



Chris Renwick, chief executive Rio Tinto Iron Ore, said, "Japan is a fundamental
market for Rio Tinto, and we are very pleased to enjoy such positive
relationships with our partners in that country.  As well as adding significant
value through the physical synergies between the Hamersley Iron and Robe River
assets, we are deepening our relationship with our Japanese partners, especially
Nippon Steel, through broader business cooperation.



"This stronger relationship will underpin several new developments, including
the expansion of the Yandicoogina iron ore mine in Western Australia and a
proposed expansion of the Hail Creek coking coal mine in Queensland."



In early January 2004, Rio Tinto announced closer cooperation in the management
of Hamersley's and Robe's assets in the Pilbara region of Western Australia.
The new developments outlined below further strengthen Rio Tinto's relationship
with the Robe partners, to the benefit of all parties.



Long term contract for Yandi iron ore

Hamersley and Nippon Steel have reached agreement in principle for the supply of
some 150 million tonnes of Yandi iron ore under a long term contract of at least
20 years.  Nippon Steel's annual uptake will be around seven million tonnes per
annum.  Ore will be supplied at the annual reference price.  The agreement is
expected to be signed later this year.



Hamersley is currently expanding the capacity of the Yandicoogina mine by 12
million tonnes to 36 million tonnes per annum at a cost of US$200 million.
Nippon Steel will purchase approximately 20 per cent of the output from the
expanded mine.



Hamersley has the flexibility to supply Yandi ore to Nippon Steel through the
Dampier port and, since October 2003, through Robe's Cape Lambert port.



Expansion of Hail Creek

In August 2003 Rio Tinto exported the first shipment of coal from the 5.5
million tonnes per annum Hail Creek metallurgical coal operation.  The operation
was constructed at a cost of US$255 million and was commissioned in November
2003.  As a result of strong response from customers for Hail Creek product in
traditional markets and China, Rio Tinto is studying an expansion of the mine.
The initial study is aimed at increasing capacity to eight million tonnes per
annum, with studies to further expand capacity also being considered.  The study
to eight million tonnes per annum is expected to be completed in the next few
months.



Nippon Steel agreed to take an interest in the Hail Creek venture in 1999, but
did not participate in the initial development of the project.  Nippon Steel has
now decided to take an interest, a move welcomed by the other Hail Creek joint
venture participants.



Under formal agreements now being finalised, Nippon Steel will take an eight per
cent interest in the total joint venture, with the other participants (Marubeni
Coal and Sumisho Coal Development) potentially increasing their combined share
by two per cent.  Following completion of these transactions, Rio Tinto will
have an 82 per cent interest in Hail Creek.



Rio Tinto and Nippon Steel have signed a 15 year contract to supply up to 30
million tonnes of Hail Creek product, at a price to be agreed between the two
parties on an annual basis.   This contract will significantly underpin the
expansion of the mine.



The expansion of Hail Creek and the change to the joint venture interests will
be subject to any necessary Government approvals.



Beasley River

Hamersley has agreed in principle to transfer a 47 per cent interest in the
Beasley River iron oredeposit to the Japanese participants in Robe for future
development.  Beasley River, located near Tom Price in Western Australia, is an
inferred resource of approximately 400 million tonnes of pisolitic ore.



The geographical and geological characteristics of the Beasley River deposit
complement and enhance the pisolite resources available to the Robe participants
at Pannawonica and elsewhere in the Robe valley.



This preliminary agreement will be developed into a formal agreement, which is
expected to be signed later this year, and will be subject to any necessary
Government approvals.



Technical exchange

Rio Tinto Shipping and Nippon Steel are cooperating on a range of logistics
initiatives for delivery of iron ore andcoal.  A joint team is investigating
options to improve vessel and port utilisation, aimed at reducing total supply
chain costs for both parties.



Rio Tinto and Nippon Steel have also agreed to increase cooperation to improve
utilisation of raw materials in the context of steel industry requirements.





Note to Editors:

Hamersley Iron is a wholly owned subsidiary of Rio Tinto and is one of the
world's leading producers of iron ore.  Hamersley owns and operates six mines in
the Pilbara region of Western Australia.



Robe River is an unincorporated joint venture and is owned by Rio Tinto (53 per
cent), Mitsui Iron Ore Development (33 per cent), Nippon Steel Australia (10.5
per cent) and Sumitomo Metal Australia (3.5 per cent).  Rio Tinto acquired its
share in the Robe River Joint Venture as part of the North acquisition in 2000.
Robe River operates two iron ore mines, which are also located in the Pilbara
region.



Hail Creek is a joint venture and is owned by Rio Tinto Coal Australia (92 per
cent), Marubeni Coal (5.33 per cent) and Sumisho Coal Development (2.67 per
cent).  Hail Creek is an open cut coking coal mine located in Queensland and is
managed by Rio Tinto Coal Australia (formerly Pacific Coal) onbehalf of the
joint venture participants.





For further information, please contact:

LONDON                                               AUSTRALIA

Media Relations                                      Media Relations
Lisa Cullimore    Ian Head
Office:  +44 (0) 20 7753 2305                        Office:  +61 (0) 3 9283 3620
Mobile: +44 (0) 7730 418 385                         Mobile: +61 (0) 408 360 101

Investor Relations                       Investor Relations

Peter Cunningham                                     Dave Skinner
Office:  +44 (0) 20 7753 2401                        Office:  +61 (0) 3 9283 3628
Mobile: +44 (0) 7711 596 570                         Mobile: +61 (0) 408 335 309
Richard Brimelow                                     Susie Creswell
Office:  +44 (0) 20 7753 2326                        Office:  +61 (0) 3 9283 3639
Mobile: +44 (0) 7753 783 825                         Mobile: +61 (0) 418 933 792


Website: www.riotinto.com




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

STRGIGDSDUGGGSR

Rio Tinto (LSE:RIO)
Historical Stock Chart
From Oct 2024 to Nov 2024

Rio Tinto (LSE:RIO)
Historical Stock Chart
From Nov 2023 to Nov 2024