In a strategic move within the mining sector, BHP and Rio Tinto have announced a collaboration to extract up to 200 million tonnes of iron ore through two non-binding Memoranda of Understanding (MOUs). This partnership will take place in the Pilbara region of Western Australia, specifically at BHP’s Yandi and Rio’s Yandicoogina mining operations, located approximately 80 kilometers apart.
Tim Day, president of BHP WA Iron Ore Asset, emphasized the initiative as a prime example of enhancing operational efficiency. He stated, “This collaboration will allow us to unlock new avenues by optimizing our existing resources.” Similarly, Matthew Holcz, CEO of Rio’s Iron Ore division, highlighted the potential to create additional value and support local employment through this partnership.
Details of the collaboration
According to the terms outlined in the MOU, BHP will supply its Yandi Lower Channel Deposit wet iron ore to Rio Tinto. This ore will be processed at Rio’s current wet plants under mutually agreed commercial terms. Furthermore, the companies intend to collaborate on the development of Rio Tinto’s Wunbye deposit, which is part of the Yandicoogina project.
BHP’s Yandi operation is part of a joint venture, where BHP holds an 85% stake alongside partners Mitsui and Itochu. In, this operation achieved a remarkable production milestone, yielding 257 million tonnes of iron ore. This volume is sufficient to construct approximately 2,980 Sydney Harbour Bridges.
About Yandicoogina
On the other hand, Yandicoogina is recognized as one of Rio Tinto’s most productive iron ore mines, pioneering the use of autonomous haul trucks and drills. The operation specializes in producing Hamersley Iron Yandi (HIY) fines, known for their low impurity levels and high iron content. These qualities make them highly sought after by steelmakers in East Asia and Southern China.
Future plans and regulatory considerations
As part of the partnership, BHP and Rio Tinto are moving forward with a detailed conceptual study, which will eventually lead to an order of magnitude study to assess the project’s viability. However, any potential implementation will depend on receiving the necessary regulatory approvals and engaging with traditional landowners.
Assuming a favorable final investment decision is reached, extraction of the first ore from both deposits is anticipated to commence early in the next decade. This venture aims to enhance production capabilities while emphasizing a commitment to sustainability and community engagement in Western Australia.
The collaboration between BHP and Rio Tinto marks a significant step forward in optimizing iron ore mining operations. By leveraging each other’s strengths and resources, both companies are positioned to extend the lifespan of their respective operations while benefiting local economies and job markets.