BHP Group Ltd (LSE:BHP, ASX:BHP) has entered a US$2 billion (AU$3.02BN) binding agreement with Global Infrastructure Partners (GIP), part of BlackRock, covering BHP’s share of the Western Australia Iron Ore (WAIO) inland power network.
WAIO comprises four main joint ventures in the Pilbara region of Western Australia, in which BHP holds an 85% interest. Under the agreement, a trust entity will be established that will be 51% owned and controlled by BHP, with GIP providing US$2 billion in funding for a 49% stake. BHP will pay the entity a tariff over 25 years, linked to BHP’s share of WAIO’s inland power usage.
BHP will retain full operational control of WAIO, including the inland power infrastructure. The deal does not alter BHP’s existing joint venture arrangements, its obligations to the State of Western Australia, or the ownership of any WAIO assets, including the inland power network.
WAIO will continue to pursue its long-term strategy of increasing iron ore production to 305 million tons per annum, supported by targeted investment while maintaining flexibility for future growth. Net proceeds from the transaction will be managed under BHP’s existing capital allocation framework.
Completion of the transaction is targeted for the end of FY2026, subject to regulatory approvals, including clearance from the Foreign Investment Review Board," BHP chief executive officer Mike Henry said.
“We are pleased to partner with GIP on this arrangement, which enables BHP to access capital while maintaining operational and strategic control of a critical part of WAIO’s infrastructure.”
BHP chief financial officer Vandita Pant said: “This arrangement is an example of BHP's disciplined approach to capital portfolio management. It strengthens our balance sheet flexibility, supports long-term value creation and enhances BHP’s shareholder value.”
About GIP
Global Infrastructure Partners, part of BlackRock, is an infrastructure investor with approximately US$189 billion in assets under management across the energy, transport, digital infrastructure, and water and waste management sectors.