Rio Tinto invests $588m in $1.1b West Angelas extension with JV partners Mitsui and Nippon Steel

Rio Tinto will pour in $US389 million ($588m) to keep iron ore flowing through its West Angelas hub in the Pilbara. The mining giant on Tuesday announced the investment to extend West Angelas’ life, with Japanese joint venture partners Mitsui and Nippon Steel to pick up the rest of the $1.1 billion tab. The West Angelas sustaining project north of Newman will help to maintain the hub’s annual iron ore output of 35 million tonnes a year and extend mining activity “for years to come”, according to Rio. All State and Federal approvals have been secured for the project. Rio iron ore chief executive Matthew Holcz said West Angelas had been an integral part of the mining giant’s Pilbara network 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,” Mr Holcz said. The extension, which will create 600 construction jobs, includes building new non-process infrastructure precincts and 22km of haul roads, with ore from the deposits set to be transported via autonomous trucks to the West Angelas processing infrastructure. First ore from the fresh deposits is due in 2027. Rio holds a 53 per cent interest in the West Angelas joint venture, with Mitsui controlling 33 per cent and Nippon Steel 14 per cent. The miner is targeting shipments of between 323mt and 338mt this financial year. At Rio’s annual general meeting in May, chairman Dominic Barton flagged a $20b spend on new mines, plant and equipment in the Pilbara over the next three years. The miner is making up for lost time after facing regulatory hurdles bringing new projects online in the aftermath of the Juukan Gorge disaster in 2020. A dearth of fresh supply has made Rio increasingly reliant on extracting lower-grade ore over the past few years, squeezing the company’s profit margins. Rio in recent months has pulled the trigger on multiple multibillion-dollar investments to replenish its Pilbara iron ore stocks. The Anglo-Australian company in March green-lit a $US1.8b spend to extend its Brockman 4 mine. Two months later, Rio opened the $3.1b Western Range mine in partnership with Chinese steelmaker China Baowu. Rio and Gina Rinehart agreed to go halves on a $2.5b investment to keep the Hope Downs mining operation alive less than a month after Western Range was opened. The Simon Trott-led miner also aims to bring the massive Rhodes Ridge mine to life by 2030. Mitsui struck a deal with the Bennett and Wright families in February to buy a 40 per cent stake in Rhodes Ridge for $8.3 billion. The Bennett family has retained a 10 per cent stake in the project and Rio owns the remaining 50 per cent. Rio’s continued investment with its Japanese partners comes a day after BHP’s highest ranking executive in Australia — Geraldine Slattery — said Australia’s business sector can no longer take its relationships with Japan for granted. Japan is Rio and BHP’s second largest market for iron ore from WA. China is the dominant customer, making up about 80 per cent of the duo’s iron ore sales. Beijing’s state-run iron ore buyer — China Mineral Resources Group — has reportedly asked domestic traders to temporarily stop purchasing any WA cargoes from BHP amid a supposed pricing dispute. CMRG was established three years ago to buy ore on behalf of China’s steelmakers in a bid to gain more leverage as a monopolistic buyer by keeping a lid on prices.