Nippon steel and BHP Billiton to Consider Strategic Alliance

Nippon Steel Corporation and BHP Billiton have reached a basic agreement to mutually explore the possibility on strategic alliance through (i) joint venture for development of new mines and expansion of existing iron ore， coking coal， manganese， etc. mines， (ii) combination transport (joint vessel arrangement)， and (iii) conducting major joint studies on the utilization of iron ore and coking coal.

Both companies have a solid relationship based on trust from many years of doing business with each other. The companies have entered into this agreement to strengthen their ties and obtain mutual benefits amid the major changes taking place in the steel industry.

Both companies will soon be organizing working teams to select appropriate projects and subjects for joint studies. For the development of new mines and the expansion of existing mines， the companies will consider the possibility of working together globally.

Furthermore， prior to this basic agreement， both companies have already agreed on combination transport between the Pacific and the Atlantic utilizing the vessels in possession of Nippon Steel Shipping Co.， Ltd.， a consolidated subsidiary of Nippon Steel， as below:

Contents of the Agreement:
1. start of the contract: in the first half of 2005
2. cargo/cargo owner:
Westbound: (East Australian coal to Europe)/BHP Billiton
Eastbound: (mainly Brazilian iron ore to Japan)/Nippon Steel
3. vessels to be used: T.B.N. (including ”NSS BONANZA”， a 170，000dwt bulker， owned by Nippon Steel Shipping Co.， Ltd.)