BC Iron and Fortescue Metals Group have formally entered into a joint venture agreement for the development of BC Iron’s Nullagine iron ore project in the Pilbara region of Western Australia.

The formation of the 50:50 Nullagine joint venture (NJV) will ensure that construction can start later this year ahead of production in the first half of 2010, the company said.

Having recently completed a feasibility study, Fortescue said Nullagine is an economically and technically robust direct shipping ore project based on a probable ore reserve of 36 million tonnes at 56.9% Fe.

The formalisation of the joint venture comes one month after the in-principle endorsement from Fortesque and will allow the project to be brought into production as soon as possible, BC Iron managing director Mike Young said.

“We were originally intending to formalise the NJV following completion of the test pit but after discussions with Fortesque both parties have agreed that forming the joint venture now is in the best interests of fast-tracking the project to production,” Young said.

The companies plan to start a 120,000t bulk sample test pit at the Outcamp deposit in September.

Production is expected to start at an initial rate of 1.5 million tonnes per annum ramping up to five million as infrastructure is upgraded, BC Iron said.