OneSteel Ltd., Australia’s second- largest steelmaker, signed a 10-year agreement to sell iron ore to China’s Rizhao Steel as it expands exports to take advantage of prices of the steelmaking raw material.
The company will sell more than 6 million tons to Rizhao, based in Shandong province, starting July 1, Sydney-based OneSteel said in a statement to the Australian Stock Exchange.
OneSteel is spending A$385 million ($318 million) adapting its Whyalla plant to free 40 million tons of iron ore from its own mines for sales overseas over a 10-year period. Iron ore prices have risen for five straight years to a record as miners can’t meet demand from Chinese steelmakers.
OneSteel says it expects to release details of other sales contracts. BHP Billiton Ltd., the world’s largest mining company, is acting as its marketing agent.
Under the agreement with Rizhao, OneSteel will arrange and provide shipping, it said.
Information from: www.bloomberg.com