PERTH (miningweekly.com) – The shareholders of diversified miner Rio Tinto have voted overwhelmingly in favour of the transaction with China Baowu Steel Group Co. to develop the Western Range iron-ore project in the Pilbara.

Western Range’s yearly production capacity of 25-million tonnes of iron-ore is expected to help sustain production of the Pilbara Blend from Rio’s existing Paraburdoo mining hub.

Rio had proposed a joint venture (JV) with Baowu over the $2-billion project, with Rio’s share of the capital cost amounting to $1.3-billion. The companies also agreed to enter into an iron-ore sales agreement at market prices covering a total of up to 126.5-million tonnes of iron-ore over approximately 13 years. This volume represents Baowu’s 46% interest in the anticipated 275-million tonnes of production from Western Range through the JV.

Rio chairperson Dominic Barton told shareholders during the company’s general meeting to vote on the transaction, that the JV and associated offtake agreement represented an opportunity for Rio to extend its relationship with Baowu, which had continued for more than four decades.

“The existing Bao-Hi JV, which we entered into with Baowu in 2002, has been a key component of that relationship and has enabled the development and success of the Eastern Range mine in the Pilbara. Baowu is an important strategic partner for Rio, including in relation to collaboration on research and development projects to reduce carbon emissions and improve environmental performance across the steel value chain,” Barton said.

He told shareholders that the development of the Western Range project underpinned Rio’s commitment to investing in new mines in Australia, and would support employment and economic development in the region, with the construction phase supporting up to 1 600 jobs and the mine requiring 800 ongoing operational roles, which would be filled by existing workers transitioning from other sites in the Paraburdoo mining hub.

About 99.75% of the votes cast at the company’s general meeting on Tuesday afternoon were in favour of the Baowu transaction and the development of the Western Range project.

In addition to shareholder approval, the transaction is also subject to a number of other conditions precedent, including Australian and Chinese government approvals. Barton expects these conditions to be satisfied, and the transaction to be finalised in late 2022, allowing construction activities to start in 2023.