Rio Tinto joint venture to develop Western Range iron ore mine in WA

Rio Tinto has announced that it is entering into a joint venture with its biggest customer, China Baowu Steel Group Co Ltd, for the development of the Western Range iron ore project in the Pilbara region of Western Australia. 

The two companies are investing approximately US$2 billion to develop the iron ore mine – with Rio Tinto contributing US$1.3 billion. 

“This is a very significant milestone for both Rio Tinto and Baowu, our largest customer globally. We have enjoyed a strong working relationship with Baowu for more than four decades, shipping more than 200 million tonnes of iron ore under our regional joint venture, and we are looking forward to extending our partnership at Western Range. 

“The development of Western Range represents the commencement of the next significant phase of investment in our iron ore business, helping underpin future production of the Pilbara Blend, the market benchmark. 

“At the same time, Rio Tinto and Baowu continue to work together on low-carbon steelmaking research, exploring new methods to reduce carbon emissions and improve environmental performance across the steel value chain,” Rio Tinto Iron Ore Chief Executive Simon Trott said. 

The Western Range operations will have a production capacity of 25Mtpa of iron ore that will help sustain production of the Pilbara Blend from Rio Tinto’s Paraburdoo mining hub. 

The development of Western Range will include building a primary crusher and an 18 kilometre conveyor system the links with the existing Paraburdoo processing plant. 

Major works on the project are expected to commence in early 2023 and first production is anticipated in 2025. 

The Western Australian Government welcomes this significant investment to develop a new iron ore mine in the Pilbara.

“This significant investment in Western Australia reflects the State Government's efforts in attracting investment, business and long-term developments that support jobs and boost our economy.

“Western Australia's strength is being able to provide a continued stable investment environment, which is testament to our growing economy, innovative and high-technological capabilities as well as our outstanding training opportunities and skilled workforce,” Premier Mark McGowan said.

The construction phase of Western Range is projected to support up to 1,600 jobs while 800 ongoing operational roles are going to be required – which will be filled by existing workers transitioning from other sites in the Paraburdoo mining hub – once the mine is up and running. 

“The McGowan Government is committed to ensuring Western Australia continues to be a secure and attractive destination for investment.

“We welcome the Western Range iron ore project for driving thousands of more local jobs and supporting more local businesses.

“This project is a significant investment for the resources sector and the economic future of Western Australia,” State Development, Jobs and Trade Minister Roger Cook said.

In addition to the development of Western Range, Rio Tinto and Baowu have also agreed to enter into an iron ore sales agreement at market prices, which will cover a total of about 126.5 million tonnes of iron ore over a 13-year period. 

“The signing of the joint venture agreement for the Western Range Project is a significant event in the history of cooperation between Baowu and Rio Tinto. We fully appreciate the persistent efforts of both teams in accomplishing the important achievement. The Bao-HI joint venture has been successfully operating for more than 20 years, leading us to a win-win result, and reaping friendship and trust. 

“We hope that the two parties will deepen the mutually beneficial and win-win relationship, continue to carry forward the spirit of sincere cooperation and further expand cooperation in more fields and aspects on the basis of working together to operate the project well,” Baowu Resources Chairman Shi Bing said. 

A Social and Cultural Heritage Plan for the project to protect significant cultural and heritage values in the area is established, and Rio Tinto has worked closely with the Traditional Owners of the land – the Yinhawangka People – to co-design this plan. 

“We have worked in partnership with the Yinhawangka People to jointly develop a Social Cultural and Heritage Management Plan as part of our commitment to protecting significant cultural and environmental values at Western Range,” Mr Trott said. 

The joint venture agreement with Baowu is subject to satisfaction of several conditions precedent. This includes approval from Rio Tinto shareholders, the Australian Government, Chinese Government regulatory agencies as well as the Western Australian Government. 

“The Pilbara is one of the most important and vital regions for Australia.

“Investments like this with appropriate approval and consultation provide welcome opportunities for the region,” Pilbara MLA Kevin Michel said.

Source: Rio Tinto; Reuters; Yahoo! Finance; Australian Mining; Government of Western Australia - Media Statements