Rio Tinto Group and BHP Group have entered into two non‑binding memoranda of understanding that will allow the two companies to jointly extract up to 200 million tonnes of high‑grade iron ore from the Yandicoogina and Yandi operations in the Pilbara region of Western Australia. The partnership will combine Rio Tinto’s Wunbye deposit with ore supplied by BHP’s Yandi Lower Channel Deposit, which will be processed at Rio Tinto’s existing wet‑processing plants under agreed commercial terms.
The collaboration builds on a 2023 agreement to mine the Mungadoo Pillar, creating a shared tenure boundary that had previously been inaccessible. Under the new MOUs, Rio Tinto will conduct a conceptual study followed by an order‑of‑magnitude study, after which a final investment decision will determine whether the joint venture proceeds. The first ore from both deposits is expected early in the next decade, providing a new source of high‑grade iron ore that can support Rio Tinto’s long‑term production growth targets.
Strategically, the deal allows both companies to unlock additional production with minimal new capital. By leveraging Rio Tinto’s existing wet‑processing infrastructure, the partnership reduces the need for new plant investment and extends the operational life of the Yandicoogina and Yandi assets. The 200 million‑tonne target represents roughly two to three years of current global seaborne iron‑ore trade, underscoring the project’s significance for supply stability and the companies’ ability to maintain market share amid declining ore grades and rising infrastructure costs.
Management highlighted the operational and economic benefits of the collaboration. Rio Tinto’s Iron Ore Chief Executive Matthew Holcz said the partnership “will unlock additional production with minimal capital requirements, extend the life of these operations, and create value for Western Australian jobs and local communities.” BHP’s WA Iron Ore Asset President Tim Day added that the deal is “a clear example of productivity in action – unlocking new opportunities by making the most of our existing resources and delivering benefit to our people, partners, customers and communities.”
The announcement received a muted market reaction, with Rio Tinto shares up 0.43 % and BHP shares down 0.03 % in pre‑market trading on the day of the announcement. The limited movement suggests that investors view the partnership as a strategic, long‑term operational improvement rather than an immediate earnings catalyst.
The collaboration also reflects broader industry trends toward operational integration in mature mining regions, as companies seek to maximize returns from existing assets while diversifying into growth commodities such as copper and lithium. It positions both Rio Tinto and BHP to sustain iron‑ore revenues while pursuing new growth areas, and it aligns with their strategic focus on cost efficiency and resource optimization.
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