Australian miner Rio Tinto has announced that it has reached an agreement with fellow Australian miner BHP to cooperate on the extraction of up to 200 million mt of iron ore from their neighbouring Yandicoogina and Yandi operations in the Pilbara region of Western Australia, aiming to unlock additional production through closer operational alignment.
The framework of the collaboration is defined under two non-binding memoranda of understanding (MOUs), under which the two mining companies will examine joint development opportunities focused on maximizing the value of existing assets and infrastructure while limiting incremental capital expenditure.
Scope of proposed collaboration
Within this framework, the parties will assess the potential joint development of Rio Tinto’s Wunbye deposit, while also evaluating an arrangement under which BHP would supply iron ore from its Yandi Lower Channel Deposit to Rio Tinto for processing at Rio Tinto’s existing wet processing plants, subject to agreed commercial terms.
Rio Tinto stated that these arrangements are intended to make more effective use of established infrastructure and processing capacity, enabling additional production with minimal new investment. The company added that the partners will proceed with a conceptual study, followed by an order-of-magnitude study, with first ore from both deposits anticipated within the next decade, subject to a final investment decision.
Executive comments
Commenting on the initiative, Matthew Holcz, chief executive of Rio Tinto Iron Ore, said that closer coordination would allow the partners to better leverage existing infrastructure to unlock incremental production, extend asset life, and continue supporting jobs and local communities in Western Australia.
From BHP’s side, Tim Day, president of BHP WA Iron Ore, stated that the agreement demonstrates productivity gains achieved through the optimization of existing resources, adding that sharing expertise and infrastructure is expected to create additional value for employees, partners, customers and communities.
