Rio Tinto, Baowu Joint Venture to Enhance Iron Ore Supply
Rio Tinto Group’s joint venture with China Baowu Steel Group Corp. to develop a new mine in Western Australia’s Pilbara region is set to longer-term iron ore supply.
The $2 billion Western Range mine is expected to come online in 2025. Its projected annual capacity of 25 million tons – equal to 8% of Rio Tinto’s total production in 2021 – will help Rio sustain the production of its flagship Pilbara Blend. Baowu will take up to 126.5 million metric tons of iron ore over 2025-2038.
Baowu is not the only Chinese state-owned company with an interest in Australian iron ore assets. Ansteel Group Corp. has the majority stake in Western Australia’s Karara mine. The Sino Iron project owned by Citic Pacific is China’s biggest investment in a single iron ore mining project in Australia. Australia-China trade tensions and high iron ore prices in 2020-21 underlined the risk of China’s reliance on iron ore imports. Chinese companies will invest more in iron ore assets overseas, including in Australia and Guinea, to secure raw materials.
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