TOKYO (Feb 19): Japanese trading house Mitsui & Co said on Wednesday it would acquire a 40% stake in the Rio Tinto-operated Rhodes Ridge iron ore project in Western Australia for US$5.34 billion (RM23.7 billion) to strengthen its long-term earnings base.

Rhodes Ridge is one of the world's largest undeveloped iron ore deposits with 6.8 billion metric tonnes of mineral resources, Mitsui said in a statement.

The Japanese company is buying out two separate stakes controlled by the family of late Australian magnate Michael Wright, whose father jointly discovered the region's iron ore lode in the 1960s.

Mitsui, with a diverse portfolio spanning metal resources, energy, machinery and food, expects production to start by 2030. Its 40% stake in Rhodes Ridge is projected to yield 16 million tonnes of iron ore a year initially, rising to more than 40 million tonnes after further expansion.

In the financial year that ended in March 2024, Mitsui's annual equity share of iron ore production was 61 million tonnes, the company said.

Mitsui expects to find cost savings by tapping existing infrastructure between Rhodes Ridge and Rio Tinto's nearby Robe River project in which it also has a stake, it said.

Iron ore from Rhodes Ridge will be blended into the ore sold by Rio Tinto and exported to Asian countries, including Japan, Mitsui added.

Wright Prospecting's former 50% interest in the Rhodes Ridge joint venture has been restructured and separated into two newly formed entities separately controlled by its shareholders, VOCG and AMB.

Mitsui will buy VOC Group's entire 25% interest for US$3.34 billion including stamp duty, with the deal expected to close by end-March 2026.

Mitsui also plans to purchase a 15% stake from AMB Holdings for US$2 billion including stamp duty.

After these transactions, Rio Tinto will hold 50% of the project, while Mitsui will own 40% and AMB 10%.

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