Rio, Baowu shell out $1bn for Western Range

Local contractors will share in a raft of new work building the iron ore mine being developed by Rio Tinto and Chinese steel major Baowu Group.

Construction started at the brownfields Western Range iron ore mine in the Pilbara at the start of 2023, with Rio revealing on Friday that $1 billion worth of contracts had been awarded for the project so far.

An estimated 1,600 jobs are expected to be generated during the build phase of the project, which comprises a new primary crusher and an 18-kilometre conveyor system linkin to Rio’s existing processing plant at the Paraburdoo hub.

Once operational from a targeted 2025, the mine will have an annual production capacity of 25 million tonnes of ore.

Henderson-based contractor Civmec has won the lion’s share of this round of work, tasked with building the run of mine pad and primary crushing facility for $330 million.

CIMIC Group subsidiary CPB Contractors – owned by German construction company Hochtief - has scored a $250 million contract to deliver main infrastructure and bulk earthworks.

MACA, which was recently acquired by Brisbane-based CIMIC subsidiary Thiess, has been tasked with constructing a camp pad and access road to the site in addition to crushing and screening work.

NRW’s Osborne Park-based offshoot Primero Group will oversee design, supply, construction and commissioning of non-process infrastructure facilities at the site for $54 million.

About $39 million worth of work has been allocated to Aboriginal businesses in the Pilbara, Rio has said.

Premier Roger Cook said significant projects such as Western Range reinforced Western Australia as an attractive and secure destination for business and investment.

"I commend Rio Tinto and Baowu Steel on this latest project milestone, which has resulted in numerous WA businesses benefiting from construction contracts worth millions of dollars,” he said.

"It's through significant projects like these that we can build a long pipeline of work for Western Australians into the future."

Rio Tinto iron ore chief Simon Trott said the $1 billion spend marked a considerable milestone for the project.

“Rio Tinto spends billions of dollars with local suppliers across WA and the Pilbara every year, helping support thriving communities across the state by providing local jobs for local people.”

Ownership of the mine is split 54 per cent and 46 per cent to Rio and Baowu, respectively, with Rio investing $US1.3 billion of the $US2 billion required to develop the project.

Rio has been pursuing the development of the Western Range mine as part of a joint venture it established almost two decades ago with China Baowu Group, one of the world’s largest steel companies.

The companies formalised a joint venture to push ahead with the project in September 2022.

Last week, Rio and Baowu signed an agreement to develop low-carbon iron ore projects together. 

Fortescue inked a similar deal in the days after.