Rio Tinto and mining billionaire Gina Rinehart will invest $2.47bn in a Pilbara iron ore mine

Rio Tinto and Australia’s richest person, mining magnate Gina Rinehart have pulled the trigger on a new iron ore mine after working through a four-year-long approval process.

Rio Tinto iron ore chief executive Simon Trott at the Rhodes Ridge iron ore deposit in WA's Pilbara region.

Rio Tinto pushed through an approvals minefield in Western Australia and will invest $US1.6bn ($2.47bn) alongside Gina Rinehart developing new iron ore operations after convincing three traditional owner groups to lend their support.

Rio and Mrs Rinehart’s private company, Hancock Prospecting, pulled the trigger on the new mine after a marathon process.

Rio kicked off the approval process for the Hope Downs 2 project back in 2021, a year after it earned international condemnation for blowing up 46,000-year-old rock shelters at Juukan Gorge in Western Australia’s Pilbara.

The mining giant has had to tread much more carefully and faced more onerous hurdles and traditional owner negotiations since Juukan Gorge, leading to doubts about its capacity to deliver on its target of a new mine a year until 2030 in the region where it faces problems with declining grades at existing operations.

The Hope Downs 2 project shores up Rio’s relationship with Mrs Rinehart – Australia’s richest person and the Hancock executive chair – built around the Hope Downs joint venture that currently includes the Hope Downs 1 and 4 and Baby Hope operations.

Gina Rinehart’s private company, Hancock Prospecting, is behind the deal. Picture: Phil Gostelow

The Hope Downs 2 project, to mine Rio and Hancock’s Hope Downs 2 and Bedded Hilltop deposits, is slated to produce 31 million tonnes of iron ore a year from 2027.

Hancock and Rio will split the cost of developing the new mine, which the last of all necessary WA and Federal government approvals signed off earlier this month.

Rio said it had negotiated with the Nyiyaparli, Banjima and the Ngarlawangga traditional owner groups along with relevant governments to ensure the “responsible management of heritage and the environment” in development of the project.

The mining of the Hope Downs 2 and the Bedded Hilltop deposits was previously referred to in Rio’s plans as “Hope Downs 1 sustaining” because they will feed into existing infrastructure.

Hancock encouraged Rio to develop the Hope Downs 2 and Bedded Hilltop deposits and has also said it wants to see deposits known as Hope 3, 5 and 6 developed sooner rather than later under their joint venture.

However, the other deposits are not part of Rio’s present mine replacement timetable which runs to the end of the decade.

Rio iron ore chief executive Simon Trott led the transaction team that pulled together the Hope Downs joint venture with Hancock signed in 2006, and is now one of the favourites to replace Jakob Stausholm as the mining giant’s chief executive.

Mr Trott said the Hope Downs 2 approval was a key milestone for Rio as it invested in the next generation of iron ore mines in the Pilbara. Rio is trying to at least maintain current production and keep a lid on costs during the transition.

“These projects are part of our strategy to continue investing in Australian iron ore and to sustain Pilbara production for decades to come, supporting jobs, local businesses and the state and national economies,” he said.

“The Pilbara has been critical to global steel supply for more than 60 years, and we are committed to ensuring it remains so well into the future.”

During the next three years, Rio expects to invest more than $US13bn on new mines, plant and equipment in the region.

Rio expects the Rhodes Ridge project, which sits close to the Hope Downs mines, to become the mainstay of its Pilbara iron ore operations from 2030.

Rhodes Ridge was at the centre of legal battles between Hancock and the heirs to the fortune of Peter Wright, including billionaire Angela Bennett, with Wright Prospecting eventually winning control. Mrs Rinehart’s father, Lang Hancock, and Mr Wright were business partners who helped pioneer the iron ore industry in WA.

Mr Wright’s descendants sold most of their stake in Rhodes Ridge to Japanese conglomerate Mitsui for $8bn earlier this year.

Originally published as Rio Tinto and mining billionaire Gina Rinehart will invest $2.47bn in a Pilbara iron ore mine