Rio Tinto has signed a heads of agreement with China Baowu Group to negotiate the potential extension of the Bao-HI iron ore joint venture (JV) in the Pilbara region of Western Australia.
Set up in 2002, the JV controls the Eastern Ranges mine and Western Range project. Since its inception, the JV has achieved sales of over 180 million tonnes of iron ore.
A pre-feasibility study for the Western Range project is underway and is expected to be completed by the end of next year.
The agreement was signed in Shanghai and seeks to strengthen the existing relationship between the companies.
Rio Tinto Iron Ore chief executive 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.”
Rio Tinto holds a 54% interest in the Bao-HI JV, while the remaining 46% is owned by Baowu.
China Baowu Steel Group, which was established in 2016 following the consolidation of Baosteel Group and Wuhan Iron & Steel (Group), is Rio Tinto’s largest Chinese customer.
The Eastern Ranges iron ore mine, which commenced operations in 2004, is located around 10km east of Paraburdoo, another Rio Tinto mine in the region.
It is part of the company’s mining operations in the Hamersley Range, which is a major source of iron ore reserves in Australia.
Rio Tinto’s operations in the Pilbara include 16 iron ore mines, four port facilities, a 1,700km rail network and associated infrastructure.