Japan’s Mitsui & Co is paying $5.34 billion for a 40% stake in the Rhodes Ridge iron ore project in Western Australia, operated by Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF).
Rhodes Ridge is one of the world’s largest untapped iron ore deposits, with 6.8 billion tonnes of mineral resources.
Mitsui is acquiring its stake from the family of Australian mining magnate Michael Wright, whose father helped discover the region’s rich iron ore reserves in the 1960s.
Production is expected to come online in around five years, initially at16 million tonnes per year before expanding to over 40 million tonnes.
Once the deal closes, Rio will hold 50% of Rhodes Ridge, with Mitsui at 40% and AMB Holdings at 10%.