BHP Billiton Mitsubishi Alliance Entered Into An Agreement To Acquire The New Saraji Coal Project

BHP Billiton today announced that BHP Billiton Mitsubishi Alliance (BMA) has entered into an agreement to acquire 100 per cent of the New Saraji Project from New Hope Corporation Limited for a cash consideration of approximately US$2.4 billion (US$1.2 billion, BHP Billiton share).

New Saraji is an undeveloped metallurgical coal resource located adjacent to BMA’s Saraji mine near Dysart in Queensland’s prolific Bowen Basin. New Hope’s total Coal Resources estimate (New Hope Analysts Briefing 27 March 2008) for New Saraji is 690 million tonnes (156 million tonnes Indicated Resources and 534 million tonnes Inferred Resources).

The purchase comprises Mining Lease Application (MLA) 70383 and Exploration Prospecting Consent (EPC) 837, and port user contract entitling the purchaser to 10 million tonnes per annum of capacity at the Abbott Point coal terminal as it is expanded. Completion is subject to certain third party consents and normal government approvals.

BHP Billiton Coal President Dave Murray said: "This acquisition is consistent with our strategy to accelerate growth in long life, low cost natural resources with a focus on delivering shareholder value. Based on drilling results to date, New Saraji has extensive high quality metallurgical coal resources. Subject to the results of further resource exploration and evaluation program to be undertaken by BMA, New Saraji has the potential to be developed into a large scale, high quality metallurgical coal operation. New Saraji could also potentially deliver significant synergies due to its proximity to BMA’s existing Saraji mine"

BMA is a 50:50 joint venture between BHP Billiton and Mitsubishi Corporation.