BHP cuts $2b Pilbara energy infrastructure deal with offshoot of US investment titan BlackRock

BHP is selling nearly half of its share in the Pilbara infrastructure powering its WA iron ore operations for $US2 billion ($3b) to US investment titan BlackRock in a balance-sheet bolstering exercise. The Big Australian revealed on Tuesday that it planned to establish a new trust for its inland power network, retaining 51 per cent and selling 49 per cent to BlackRock’s subsidiary Global Infrastructure Partners. The infrastructure deal covers the gas-fired Yarnima power station in Newman, more than 400km of transmission and distribution lines, as well as substations and control systems that supply electricity to the WA iron ore business and the Newman township. BHP has trumpeted the transaction as a first-of-its-kind in the Australian mining industry and a savvy way to generate cash from its assets outside of usual revenues from digging and selling resources. Woodside Energy struck a similar deal with GIP in exchange for a 49 per cent stake in the energy major’s Pluto Train 2 LNG expansion near Karratha in 2021. The cash inflow comes at a good time for the miner as it readies for a high spending period ramping up copper projects, decarbonising and debottlenecking in the Pilbara, according to RBC Capital Markets analyst Kaan Peker. “We view the transaction as incrementally positive and expect further monetisation optionality across BHP’s broader infrastructure footprint over time,” he wrote on Tuesday. “We see the structure as consistent with BHP positioning WAIO as a lower-risk, capital-light cash engine and supports BHP’s capital-efficiency theme, consistent with prior commentary on freeing capital for growth.” As part of the deal, the miner will pay the new trust a tariff linked to BHP’s share of the power over a 25-year period. Making the investment in the poles, wires and plants that keep the Pilbara iron ore machine running will be GIP, a specialised offshoot of global asset manager BlackRock. The New York-headquartered money manager is reported to hold more than $US12.2 trillion of investments. GIP has not responded to requests for comment on the deal. The transaction is expected to be finalised by the end of the 2026 financial year, however it will require the approval of the Foreign Investment Review Board. BHP said the transaction would not impact its operational control and ownership of its WA Iron Ore business — of which it owns 85 per cent — nor any existing joint venture agreements or obligations with the State Government. “We are pleased to partner with GIP on this arrangement that enables BHP to access capital and maintain operational and strategic control of a critical part of WAIO’s infrastructure,” chief executive Mike Henry said. The Pilbara delivered the lion’s share of BHP’s iron ore turnover of $US22.9b in 2025 out of company-wide revenues of $US51.2b. BHP shares closed slightly lower at $44.