BHP Billiton has agreed with Leighton Holdings to buy the HWE Mining subsidiaries that provide contract mining services to its Western Australia iron ore operations.
The US$735M agreement relates to the mining equipment, people and related assets that service the Area C, Yandi and Orebody 23/25 operations. These operations collectively account for almost 70% of Western Australia ore’s movement.
BHP Billiton President Iron Ore, Ian Ashby said: “While this move to an owner-operator model will remove a layer of complexity and costs from our business, the real focus of this proposed transaction is the work force.
“Transitioning to owner operator in this way, rather than by replacing contractors through direct recruitment, is a lower risk strategy as it would be challenging to replace the highly skilled and long serving HWE employees in the current environment.”
The deal is expected to be completed in Q4 2011.