Major Chinese steelmaker Baowu Group has inked a cooperation agreement with iron ore mining giant Rio Tinto to set up a joint venture for the Western Range iron ore project in Western Australia’s Pilbara region, with each party holding 46 percent and 54 percent of the shares in the JV, respectively, as announced by Baowu Group on September 14.
The Western Range project is expected to produce 275 million mt of iron ore during the duration of the JV, with an annual designed capacity of 25 million mt and average Fe content of 62 percent. The overall investment in the project is expected to amount to $2.0 billion. Construction will start from the beginning of 2023 and the project will be put into operation in 2025.
Moreover, Baowu Group has also signed an iron ore purchase agreement with Rio Tinto. Accordingly, Baowu Group will purchase a total volume of 126 million mt of Rio Tinto’s iron ore products in proportion to its equity, or about 11.5 million mt of iron ore per year.