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June 25, 2025 | Western Australia
Global mining major Rio Tinto (ASX: RIO) and privately held Hancock Prospecting have confirmed a major $2.5 billion joint venture investment in Western Australia’s Pilbara region, committing to the development of two new iron ore pits at the Hope Downs mine complex, 1,200 kilometres north of Perth.
The announcement is being seen as a significant vote of confidence in the Pilbara’s long-term viability amid broader concerns over declining iron ore prices, reduced Chinese demand, and shrinking royalty revenues for the WA government.
Project Overview
- Joint Venture: Rio Tinto and Hancock Prospecting
- Project: Hope Downs 2 (including Bedded Hilltop deposit)
- Cost: $2.5 billion
- Production Capacity: 31 million tonnes per year (from 2027)
- Jobs Created: 950
- Ownership: 50/50 investment share
Having secured approvals from traditional owners and both state and federal governments, the long-delayed Hope Downs 2 project will now proceed. It marks a revival for the area after being shelved due to fallout from Rio Tinto’s destruction of the Juukan Gorge heritage site in 2020.
Strategic Importance and Infrastructure
The expansion includes significant infrastructure work:
- Construction of haul roads and railway crossings
- Realignment of 6km of the Great Northern Highway
- Investment of up to $20 billion over three years in Pilbara-wide infrastructure and equipment
While Hancock is pushing to accelerate development of adjacent deposits (Hope 3, 5, and 6), these are not currently included in Rio Tinto’s mine replacement plan.
Rio Tinto’s Broader Pilbara Strategy
Rio Tinto iron ore CEO Simon Trott said Hope Downs 2 is part of the miner’s long-term commitment to sustaining production levels and regional employment.
“These projects are part of our strategy to continue investing in Australian iron ore and to sustain Pilbara production for decades to come,” Trott said.
Rio aims to maintain a production rate of 360 million tonnes annually across its Pilbara operations, with the Rhodes Ridge project slated to become a core part of that strategy from 2030.
Two weeks ago, Rio opened the Western Range mine—a separate joint venture with China’s Baowu Steel (Rio: 54%, Baowu: 46%)—which is expected to add another 25 million tonnes per annum, supporting the nearby Paraburdoo hub for up to two decades.
Economic and Market Context
The investment comes amid growing concerns about the future of iron ore in WA. Fortescue Metals chairman Andrew Forrest recently warned the Pilbara risked becoming a “wasteland” due to falling demand and ore quality concerns.
In May 2025, Chinese steel production fell by 6.9%, significantly impacting global iron ore demand. As a result, the WA State Budget has projected:
- A $1.8 billion drop in iron ore royalties for FY2024–25
- A further $2 billion decline expected in FY2025–26
Despite market headwinds, the renewed commitment from Rio Tinto and Hancock indicates long-term confidence in the Pilbara’s strategic value to both Australia and the global steel industry.
BHP-Billiton-Rio-Tinto-hq-Picture-on-Flickr-by-Eric-Fidler
