On 5 June 2009, BHP Billiton and Rio Tinto signed core principles to establish a production joint venture covering the entirety of both companies' Western Australian Iron Ore assets. This resulted in the signing of definitive agreements on 5 December 2009. The completion of these agreements was subject to a number of conditions, including regulatory approvals.
Since the agreement was signed it has become increasingly apparent that regulatory approvals of the joint venture are unlikely to be achieved. Consequently, BHP Billiton and Rio Tinto have reluctantly agreed to dissolve the proposed joint venture.
BHP Billiton Chief Executive Officer, Marius Kloppers, said, "The large synergies from combining our Western Australian iron ore assets with Rio Tinto's have caused us to persevere in seeking to obtain regulatory approvals. However, it has become clear that this transaction is unlikely to obtain the necessary approvals to allow the deal to close and as a result both parties have reluctantly agreed to terminate the agreement".
Mr Kloppers said he appreciated the high level of cooperation and goodwill displayed by Rio Tinto in pursuing the joint venture. The parties have mutually agreed that no break fee is payable.
While BHP Billiton was progressing approvals for the joint venture, it has continued to invest in its Western Australian Iron Ore business. With the termination of the joint venture, this focus on efficiently growing and operating our Western Australian Iron Ore business through our existing Perth-based Iron Ore management team will continue.