Rio Tinto has agreed to enter into discussions with China Baowu Group for extending their Bao-HI iron ore joint venture (JV) in the Pilbara region in Western Australia.
In this connection, Rio Tinto has signed a heads of agreement with the Chinese steel production company regarding the Bao-HI iron ore JV, which sold more than 180 million tons since its creation in 2002.
According to the mining giant, the JV is pertained to the Eastern Ranges mine and Western Range project. Rio Tinto has started a pre-feasibility study in the Western Range project, which is likely to be wrapped up by the end of 2019.
The Eastern Ranges mine is located in the Hamersley Range, which is a mountainous region of the Pilbara.
The mining major said that the agreement reinforces its partnership with Baowu and recognizes the significant expertise and knowledge the companies bring to the joint venture.
Rio Tinto iron ore CEO Chris Salisbury said: “The signing of this agreement is a significant milestone in the partnership between Rio Tinto and Baowu that extends back more than four decades and was enhanced with the creation of the Bao-HI JV.
“The success of this relationship has contributed to the growth of both our organisations over many years and is one which continues to develop and strengthen over time.”
The Bao-HI iron ore JV is owned 54% by Rio Tinto and 46% by Baowu.
Last month, Rio Tinto approved $2.6bn investment in the Koodaideri iron ore mine in the Pilbara region. Depending on the final approval from the Western Australian government, the Koodaideri iron ore project is anticipated to break ground next year with a target to begin production in late 2021.
The Koodaideri iron ore mine, which is located nearly 110km from Newman, is estimated to have an annual production of 43 million tons to underpin production of the Rio Tinto’s Pilbara Blend iron ore product.
In October, Rio Tinto alongside its JV partners Mitsui and Nippon Steel & Sumitomo Metal approved $1.55bn to maintain production capacity at two Australian iron ore projects – Robe Valley and West Angelas in the Pilbara region.