Rio Tinto and BHP Billiton signed a non-binding agreement on June 5, 2009, to establish a production joint venture covering their iron ore assets in Western Australia. The joint venture would encompass all of the companies' current and future Western Australian iron ore assets and liabilities and would be owned 50% each by BHP Billiton and Rio Tinto. Iron ore production would be delivered in equal volumes to the two companies and sold independently through their separate marketing groups. BHP Billiton would pay Rio Tinto 5.8 billion dollars for equity type interests at financial close of the agreement to take its interest in the joint venture from 45% to 50%. Based on this calculation (5.8 billion dollars equals 5%), the full equity value of the joint venture would be 116 billion dollars.
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