(Reuters) – Rio Tinto Ltd said on Wednesday it would team up with its biggest customer China Baowu Steel Group to develop an iron ore project in Western Australia as it looks to prop up its production from the Pilbara region.
The global miner will invest $1.3 billion to develop the Western Range project in Pilbara and will hold a 54% stake in it, while state-owned steelmaker China Baowu will hold the remaining stake and will invest $700 million.
“Western Range’s annual production capacity of 25 million tonnes of iron ore will help sustain production of the Pilbara Blend from Rio Tinto’s existing Paraburdoo mining hub,” the world’s largest iron ore producer said https://bit.ly/3dfeQlV.
Pilbara Blend products are known for their high-grade quality and consistency, and make up about 70% of Rio Tinto’s iron ore product portfolio, according to the miner’s website.
The companies also entered a sales agreement that will see China Baowu buy up to 126.5 million tonnes of the steelmaking ingredient over about 13 years.
That represents China Baowu’s 46% interest in an anticipated 275 million tonnes of production from Western Range.
Construction at the project is expected to begin in early 2023, with first production anticipated in 2025, Rio Tinto said.
(Reporting by Sameer Manekar in Bengaluru; Editing by Devika Syamnath and Himani Sarkar)
