BHP Pens US$2 Billion Deal to Boost Pilbara Iron Ore Expansion

BHP (ASX:BHP,NYSE:BHP,LSE:BHP) has secured a fresh source of long-term funding for its iron ore operations in Western Australia, agreeing to a US$2 billion infrastructure deal with Global Infrastructure Partners (GIP).

The Tuesday (December 9) announcement confirms the company has entered into a binding agreement with GIP that covers BHP’s share of Western Australia Iron Ore’s (WAIO) inland power network.

Under the structure, a new trust entity will be created and majority owned by BHP with a 51 percent stake, while BlackRock (NYSE:BLK) subsidiary GIP will take the remaining 49 percent in exchange for its US$2 billion contribution.

Over a 25 year period, BHP will pay the entity a tariff tied to its power use.

The deal gives BHP additional balance sheet flexibility at a time when the company is pursuing a renewed push to grow iron ore volumes. Currently, the company holds an 85 percent interest in WAIO, which spans four major joint ventures supplying some of the world’s most important steelmaking customers.

Operationally, BHP will continue to run the inland power infrastructure and maintain full strategic oversight of WAIO.

The deal does not alter existing joint venture rights or the company's commitments to Western Australia; ownership of the power network’s physical assets remains unchanged.

In a company press release, BHP Chief Executive Mike Henry framed the transaction as a prudent way to unlock capital without giving up control of core infrastructure.

“We are pleased to partner with GIP on this arrangement that enables BHP to access capital and maintain operational and strategic control of a critical part of WAIO’s infrastructure,” he said.

BHP is in the midst of a long-term push to lift Pilbara production capacity to 305 million metric tons per year. The WAIO business will continue to plan and execute its broader strategy, while keeping optionality for future growth.

Completion is expected toward the end of the 2026 fiscal year, subject to regulatory clearances, including approval from Australia’s Foreign Investment Review Board.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.