Rio Tinto, Japanese firms pour $733M into Pilbara mine

Rio Tinto (ASX: RIO) and its Japanese joint-venture partners will invest $733 million to extend the life of the West Angelas iron ore hub in Western Australia’s Pilbara region by developing new deposits.

The Robe River Joint Venture, which includes Mitsui & Co. and Nippon Steel, has secured state and federal approvals for the West Angelas Sustaining Project, in the works since 2018. Rio Tinto will contribute $389 million toward the development, which will maintain the hub’s annual production capacity at 35 million tonnes and extend mining operations for several years.

 “The West Angelas Sustaining project is built on strong and committed partnerships, both with the joint venture members Mitsui and Nippon Steel, as well as the Yinhawangka and Ngarlawangga Peoples,” Rio Tinto Iron Ore CEO Matthew Holcz said in a release.”The West Angelas hub has been an integral part of Rio Tinto Iron Ore since 2002. Securing these approvals ensures ongoing investment in the hub as we continue to supply high-quality, reliable iron ore to meet our global customers’ demand now and into the future.”

Pilbara strategy

The mine extension is part of Rio Tinto’s broader strategy to sustain output across the Pilbara by replacing production from aging operations. Together, these mines support a total annual capacity of around 130 million tonnes.

Rio Tinto shares gained 0.5% to A$124.18 apiece on Tuesday in Sydney, valuing the company at A$45.87 billion. The stock has traded in a 12-month range of $100.75 to $126.04. 

Construction is expected to generate about 600 jobs, while 950 full-time positions will be sustained once the project becomes operational, Rio Tinto said. First ore from the new deposits is expected in 2027.

Keeping up

West Angelas has been a key part of Rio Tinto’s operations since 2002. Beyond this project, the miner is advancing a pre-feasibility study at Rhodes Ridge, targeting an initial capacity of up to 40 million tonnes per year, with first ore planned by 2030.

Rio Tinto also recently opened the $2 billion Western Range iron ore mine in partnership with China Baowu Steel Group, aimed at sustaining output from its Paraburdoo hub for up to two decades.

A report from Australia’s federal Office of the Chief Economist on Tuesday confirmed that iron ore remains Australia’s top resources export, valued at more than A$100 billion ($66 billion) annually. 

Weaker prices, however, are expected to reduce export earnings by A$3.9 billion ($2.6 billion) to A$113 billion ($74 billion) this financial year, and further to A$103 billion ($68 billion) next year.