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Mitsui & Co., Ltd. ( "Mitsui", Head Office : Tokyo, President and CEO: Tatsuo Yasunaga) has decided to develop the South Flank iron ore mine ("South Flank") through the Mt. Goldsworthy Joint Venture, which is jointly operated by Mitsui, BHP, and ITOCHU Corporation ("ITOCHU") in Western Australia (Mitsui: 7%, BHP: 85%, ITOCHU: 8%). The total investment amount excluding the initial funding will be approximately US$3.4 billion, of which Mitsui's investment will be approximately US$0.24 billion in proportion to its equity share. Operation of South Flank is planned to be launched in 2021, and the mine is expected to produce ore for more than 25 years.
South Flank is an iron ore mine located in the Pilbara region of Western Australia. It will replace production from the neighboring 80 Mtpa Yandi mine, which is coming close to the end of its economic life. Through open-pit mining with low operational costs, this large-scale mine will produce high grade iron ore. By making full use of existing infrastructure, South Flank will significantly reduce development expenses, realizing substantial cost competitiveness.
Mitsui has been building a long-term partnership with BHP and ITOCHU in the iron ore business in Western Australia since 1967, and today, they jointly own four iron ore operations. The total annual shipment volume reached approximately 270 million tons for the FY 2017, and is expected to reach the run rate of 290 million tons by the FY 2019.
Mitsui has identified the mineral & metal resources area as one of its core pillars in its current Medium-term Management Plan, and is further strengthening its iron ore business, which already boasts world class cost competitiveness. While the supercycle of mineral resources resulting from the rapid growth of China has peaked out, the demand is anticipated to remain stable, mainly in Asia. In particular, the demand for high grade ore is expected to rise due to its environmental friendliness. Mitsui will reinforce its competitive superiority by increasing its cost competitiveness, equity production volume, and ore reserves, with the aim of further strengthening the company's earnings base.