Japanese trading giant Mitsui & Co. has announced a $5.3 billion investment in an Australian iron ore project, securing a 40% stake in the Rhodes Ridge deposit in Western Australia. The strategic acquisition is seen as a bet on the future of high-quality raw materials that will be crucial for the steel industry’s transition to more sustainable practices.
The deal, which Mitsui confirmed on Wednesday, sees the company purchasing shares from two minority stakeholders. Rio Tinto Group, one of the world’s leading iron ore suppliers, will retain a 50% stake in the project, which is set to begin production in 2030.
Kenichi Hori, President of Mitsui & Co., referred to the acquisition as a “crown jewel asset” in the Pilbara region, known for its rich metals deposits. “This is Mitsui’s largest ever investment,” he said in Tokyo, highlighting the significance of the deal after years of relationship-building with stakeholders.
The investment comes at a time of transformation in the global iron ore market, as China’s slowing economy and the steel industry’s push to decarbonize reshape demand. While iron ore demand is growing at a slower pace than during the peak years of the 21st century, the need for high-grade materials has increased as steelmakers adopt greener technologies.
MineLife Pty analyst Gavin Wendt noted that the partnership with Rio Tinto further strengthens Mitsui’s ties with the company and ensures a continued supply of premium iron ore for Japan’s steel mills. Mitsui has been involved in the Pilbara region since the 1960s, with additional investments in metals industries from Brazil to China.
In addition to the strategic partnership with Rio Tinto at the Rhodes Ridge site, Mitsui has a stake in the Robe River mine in the same region. Mitsui’s shares fell by 1.4% in Tokyo, while Rio Tinto’s shares rose by 1.1% in Sydney by the close of trading.
Strategic Acquisition of a Global Resource
Mitsui’s stake comes from purchasing the 25% interest held by VOC Group and a 15% stake from AMB Holdings Pty. VOC and AMB represent the heirs of Peter Wright and Lang Hancock, pioneers who discovered vast iron ore reserves in the Pilbara, fueling Australia’s mining boom.
Rhodes Ridge is considered one of the world’s largest untapped iron ore deposits, with an estimated resource of 6.8 billion tons. Initial production is projected to reach 40 million tons annually, with future output potentially reaching 100 million tons.
Rio Tinto, which spent $77 million in 2023 on preparatory studies for the project, has struggled with declining production of high-quality iron ore from other Pilbara sites. The new deposit at Rhodes Ridge is seen as a key asset to offset production declines and ensure a stable supply of superior-grade iron ore.
Meanwhile, Rio’s much-anticipated Simandou project in Guinea, another high-grade source, is expected to begin ramping up later this year.
Iron ore prices have fallen significantly from their pandemic-era highs, trading near $100 per ton after surpassing $230 a ton. The downturn follows China’s property crisis, which has dampened domestic steel demand, although the country still produced nearly a billion tons of steel in 2024.
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