Rio Tinto Ltd (LSE:RIO, ASX:RIO, OTC:RTNTF) added to gains in the materials sector, rising 1% after agreeing to work with BHP Group Ltd (LSE:BHP, ASX:BHP) on extracting up to 200 million tonnes of iron ore from their neighbouring Yandicoogina and Yandi operations in the Pilbara.
Under two non-binding memoranda of understanding, the companies will explore collaboration on developing Rio Tinto’s Wunbye deposit, while BHP will supply ore from its Yandi Lower Channel Deposit to Rio Tinto for processing through Rio’s existing wet plants under agreed commercial terms.
The latest proposals build on a 2023 agreement to mine the Mungadoo Pillar, enabling the extraction of ore along a shared tenure boundary that had previously been inaccessible.
Rio Tinto and BHP will progress a conceptual study, followed by an order-of-magnitude study. Subject to a final investment decision, first ore from both deposits is expected early next decade.
BHP climbed about 3% in morning trade to a 52-week high, edging closer to the $50 level. The miner hit an intraday high of $49.49 before last trading up 2.8% at $49.46, still below its all-time high of $50.84 reached on December 28, 2023.
The stock has risen about 8% since the start of the year, supported by a rotation into miners as prices for key metals — including copper, silver, platinum and gold — have pushed to record levels amid rising geopolitical uncertainty, supply concerns and expectations of a weaker US dollar.
Thursday’s move lifted BHP’s market capitalisation to about $251.2 billion, narrowing the gap to Commonwealth Bank at $253.78 billion as the race for the ASX’s top spot tightens.