Rio's Baowu JV to kick in in March
PERTH (miningweekly.com) – Mining major Rio Tinto’s joint venture (JV) with China’s Baowu Steel Group is expected to become effective in March this year, with Rio reporting that all primary environmental and Australian government approvals were now in place.
The two companies last year reached a JV agreement over the $2-billion Western Range iron-ore project, in the Pilbara, which would see the companies jointly develop the operation. Rio’s share of capital is expected to reach $1.3-billion.
Western Range’s yearly production capacity of 25-million tonnes of iron-ore will help sustain production of the Pilbara Blend from Rio’s existing Paraburdoo mining hub. The project includes construction of a primary crusher and an 18 km conveyor system linking it to the existing Paraburdoo processing plant.
Construction is expected to begin in early 2023 with first production anticipated in 2025.
The construction phase will support approximately 1 600 jobs with the mine requiring about 800 ongoing operational roles which are expected to be filled by existing workers transitioning from other sites in the Paraburdoo mining hub, Rio told shareholders.
Rio said in its annual results on Wednesday that Chinese regulatory approvals for the JV were progressing and that the JV is anticipated to start in March, once all of the operational elements of the JV are in place.
Rio has started early works site mobilisation and has awarded major contracts.
Rio and Baowu have also agreed to enter into an iron-ore sales agreement at market prices covering a total of up to 126.5-million tonnes of iron-ore over approximately 13 years. This volume represents Baowu’s 46% interest in the anticipated 275-million tonnes of production from Western Range through the JV.
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