Sydney, Jan 15, 2026, 16:49 AEDT — Market closed
- BHP shares jumped 2.5% following the announcement of a Pilbara iron ore partnership with Rio Tinto
- The plan remains non-binding and in its early stages; initial ore production is targeted for the next decade
- Attention turns to BHP’s operational review on Jan. 20, where volume and cost updates are expected
BHP Group Ltd (BHP.AX) shares ended Thursday up 2.47%, closing at A$49.31. The jump came after BHP and competitor Rio Tinto revealed a joint plan for a long-term iron ore project in Western Australia’s Pilbara. The stock reached A$49.75 during the session, tying its 52-week peak.
This shift signals a more pragmatic mood in the Pilbara: extract more tonnes using the current rail and processing setups, without splashing out big upfront cash. Investors have been pressing miners to keep capital spending in check, even while pledging growth in “future-facing” metals like copper.
Iron ore remains the backbone. It accounts for roughly two-thirds of core earnings at the major miners, despite their growing focus on copper to fuel the energy transition, Reuters reported.
Rio and BHP have inked two non-binding memoranda of understanding to look into developing Rio’s Wunbye deposit and routing ore from BHP’s Yandi Lower Channel Deposit through Rio’s existing wet plants—facilities that use water to separate ore from waste. Rio iron ore chief executive Matthew Holcz described the move as an effort to “unlock additional production with minimal capital requirements.” BHP WA Iron Ore Asset President Tim Day dubbed it “productivity in action.” Both companies expect first ore early next decade, pending final investment decisions and approvals. Rio Tinto
The news pushed the wider iron ore sector higher. Rio Tinto (RIO.AX) gained 0.61% to close at A$147.56, while Fortescue (FMG.AX) added 0.44%, finishing at A$22.75.
Iron ore prices have held firm but lacked any big moves. Benchmark 62% iron ore fines futures hovered near $107.68 a tonne on Wednesday, slipping 0.2% for the day after trading in a tight range recently.
For BHP holders, the real question is what this deal signals for Pilbara’s next production phase: more incremental brownfield tonnes, shared infrastructure, and fewer headline-grabbing new builds. The idea sounds simple enough on paper. Actually locking in a development plan will take a while.
But the risks are clear. The agreements remain non-binding, the work is still in the study phase, and the route depends on approvals and consultations. A drop in Chinese steel demand or another fall in iron ore prices could further dampen enthusiasm for projects that won’t deliver returns until the next decade.
The next key event is imminent. BHP will release its operational review for the half-year ended Dec. 31 on Jan. 20, with full results set for Feb. 17, per the company’s calendar.
