ITOCHU to Make Capital Investment to Develop South Flank project

- Sustaining supply chain capacity and strengthening competitiveness of Western Australia Iron Ore Operations-

June 15, 2018

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; COO: Yoshihisa Suzuki; hereinafter “ITOCHU”) has approved capital expenditure to develop the South Flank project of its Western Australia Iron Ore Operations (“WAIO”). WAIO is run as a joint venture with leading mining company, BHP (Australia & UK).

The capital investment excluding initial funding is expected to total US$3.4 billion with the ITOCHU share approximately US$0.27 billion.

The South Flank project area is located to the south of the existing Mining Area C (MAC), and the project will replace production from the 80Mt per annum Yandi mine. The project expands the existing infrastructure at MAC, which contributes to reducing total Capital expenditure, and involves construction of a crushing and screening plant, stockyard and train loading facilities, procurement of new mining fleet and other activities for mine development and pre-strip. It will sustain the supply chain capacity of the Western Australia Iron Ore operations for a substantial period, and increase average iron grades and add value to iron ore product.

Production from South Flank mine is expected to continue for more than 25 years. First ore is targeted in the 2021 calendar year. The South Flank project creates significant job opportunities in the local community. The WAIO, with the South Flank project continues to develop sustainable projects with careful consideration for the environment, health, and labor safety, and harmony with people in local communities.

ITOCHU, with BHP and Mitsui & Co., Ltd. own the three iron ore joint ventures of Mt. Newman, Yandi and Mt. Goldsworthy, and also the Jimblebar mine through investment in BHP Iron Ore (Jimblebar) Pty. Ltd. in Western Australia (BHP holds an 85% share, ITOCHU 8%, Mitsui 7%), and is currently expanding system capacity to 290 million tons per annum.

ITOCHU will strengthen the partnership with its excellent partners, and will continue to seek investments in superior assets with a high level of competitiveness.

Profile of BHP

・Established: June 30th 2001
 A leading mining company, which focused on iron ore, coal, oil, copper, etc.
・Head Office: Melbourne, Australia
 A dual-listed company in Sydney and London. Also listed on the markets in Johannesburg (South Africa) and New York.
・Recent Performance (Full year ending June 2017 (July 2016 – June 2017))
 Proceeds: US $38,285 million (Approximately \4.2 trillion)
 Earnings after tax: US $5,890 million (Approximately \650 billion)

Location of the project