Nippon Steel and Rio Tinto Reach Basic Agreement on Comprehensive Alliance

Nippon Steel Corporation (President: MIMURA Akio) and Rio Tinto (Head Offices: London and Melbourne， Chief Executive: Leigh CLIFFORD) have reached a basic agreement on creating a comprehensive alliance for the acquisition of interests in and joint development of Australian mines of iron ore and coking coal and conclusion of long-term contracts for such raw materials， as well as cooperation in marine transport and technical exchanges regarding the use of metallurgical raw materials. Detailed terms and conditions for each of these items will hereafter be discussed， to be followed by the conclusion of definitive agreements.

Over many years， Nippon Steel has maintained close relationships with Rio Tinto and other raw material suppliers. At present， Rio Tinto energetically promotes the development and expansion of iron ore and coal deposits in Australia to meet the worldwide tightening of supply and demand of steel raw materials resulting from brisk demand by China and other countries. Nippon Steel anticipates that the comprehensive alliance with Rio Tinto will ensure the stable supply of raw materials over medium- to long-term periods through its support for supply capacity increase， joint mine development and long-term contracts for both iron ore and coking coal， and further strengthen the ties with Rio Tinto by cooperation in a wide range of areas including marine transport and technical exchanges.

Nippon Steel’s acquisition of mining interests and investments in mine development will be implemented through Nippon Steel Australia Pty Ltd (Head Office: Sydney). To cope with expanding resources-related businesses， a representative office of Nippon Steel Australia has been established in Perth， Western Australia， effective on April 1， 2004.


Major items in Nippon Steel-Rio Tinto comprehensive alliance are as follows:


Iron ore

　・Acquisition by Nippon Steel of 28.2% of the interests Hamersley Iron Pty Limited holds in Beasley River iron ore deposit and joint development of the mine.

(Sumitomo Metal Industries， Ltd. and Mitsui & Co.， Ltd.， the two other Japanese partners in Robe River Joint Venture， will each obtain 9.4% of Beasley River interests， bringing the total interests to be held by the three Japanese companies to 47%.)

　・Long-term contract (exceeding twenty years) totaling approximately 150 million tons of iron ore from the existing Yandi Mine and support for future expansion of the mine.



Coking coal

・Acquisition by Nippon Steel of 8% of the interests in Hail Creek Joint Venture (which operates a new mine producing high-grade hard coking coal)， conclusion of a long-term contract for its coking coal and support for future expansion of the mine.

・Support for the consolidation of operations of Warkworth coal mine (Nippon Steel 9.5%， Rio Tinto 55.6%， Mitsubishi Corporation and others 34.9%) and Mt. Thorley coal mine (POSCO 20%， Rio Tinto 80%). The consolidation was agreed in February 2004.


Marine transport

　・Cooperation for the establishment of an efficient transportation system including combination transport.


Regular technical exchanges

　・Implementation of technical exchanges regarding the utilization of metallurgical raw materials.

For further information：Public Relations Center +81-3-3275-5021