SYDNEY: Rio Tinto Group has formed a joint venture with its biggest customer, Chinese state-owned giant China Baowu Steel Group Co, to develop a new iron ore mine in Western Australia’s Pilbara region.
Rio will take a 54% stake in the new Western Range mine, and Baowu will hold 46%. The mine will cost US$2bil (RM9.1bil) of which Rio will provide US$1.3bil (RM5.9bil), and is expected to begin producing in 2025, Rio said in a statement yesterday.
The deal extends a long relationship between one of the world’s biggest iron ore producers, and the globe’s largest steelmaker, as defined by Bloomberg Intelligence.
The two companies previously collaborated on the Bao-HI Joint Venture to develop iron ore in Western Australia, and in 2020 announced that they would collaborate on low-carbon steel making technology.
The latest joint venture will require the approval of Rio shareholders under Australian listing rules, because another Chinese state-owned enterprise, Chinalco, indirectly holds 11.3% of Rio, according to the statement. — Bloomberg
