Zhi Tong Cai Jing·2026-01-15 06:41Core Viewpoint - BHP and Rio Tinto are planning a collaboration in Australia's Pilbara iron ore region to increase steelmaking material production capacity to nearly 200 million tons starting in the next decade [1][2] Group 1: Collaboration Details - The two mining giants signed two non-binding agreements to explore cooperation on Rio Tinto's Wunbye deposit and BHP's Yandi project to enhance long-term capacity [1] - The first memorandum focuses on the joint development of the Wunbye deposit, while the second involves transporting some ore from the expanded Yandi project to Rio Tinto's processing facilities [2] Group 2: Market Context - Despite a shift towards metals needed for energy transition, mining companies are still looking for ways to maintain iron ore revenue due to ongoing demand for steelmaking raw materials from other Asian economies [1] - Pilbara has been a core area for global iron ore supply for the past 25 years, having delivered billions of tons to China, which has supported its rapid economic growth [2] Group 3: Challenges and Financial Strategies - Mining companies face challenges with declining ore grades, which have contributed to lower iron ore prices [2] - BHP and Rio Tinto are balancing capacity expansion with capital management while seeking to maximize the efficiency of existing infrastructure [2] - BHP recently sold a significant portion of its iron ore business's supporting power grid for $2 billion to BlackRock's Global Infrastructure Partners LP, with proceeds directed towards copper and other key business areas [2]