Mining giant BHP has agreed to exchange a 49% stake in its Western Australian Iron Ore (WAIO) unit’s inland power network for $2bn (R34bn). The deal, forged with US-based BlackRock subsidiary Global Infrastructure Partners, will see BHP retain a controlling (51%) stake in the network while unlocking access to new capital, said BHP CFO Vandita Pant. The two groups will form a jointly owned “trust entity”, to which BHP will pay a tariff, relative to its share of WAIO’s inland power over the next 25 years.
The deal is expected to go through towards the end of next year, subject to regulatory approvals. In a statement on Tuesday, the company said the funding would be incorporated into and evaluated in accordance with its capital allocation framework. It reassured investors that the deal would not affect existing joint venture agreements, the group’s obligations to Western Australian government or its ownership of any WAIO assets.
“WAIO will continue to plan and execute its long-term strategy focused on increasing iron ore production to 305-million tonnes per annum, supported by targeted investments, while retaining optionality for future growth,” it said. WAIO is a massive operation, comprising four key joint ventures in the Pilbara region of Western Australia, which include four processing hubs and five mining hubs connected by more than 1,000km of rail infrastructure. Despite a strong operational performance, WAIO has been weighed down by uncertain and volatile iron ore markets this year, fuelled by US tariffs and retaliatory Chinese duties. After posting its worst profit since 2020 in the year to end-June, the base metals heavyweight reassured investors in October that it expected iron ore prices to recover in the 2026 financial year, supported by stronger economic growth in China.
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