BHP strikes $3b deal with Global Infrastructure Partners over WA infrastructure assets
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The news: Mining giant BHP has entered into a binding agreement with Blackrock-owned investor Global Infrastructure Partners (GIP) to sell part of its stake in Western Australia Iron Ore's (WAIO) inland power network for USD2 billion ($3 billion).
The numbers: BHP currently holds an 85% interest in WAIO, which comprises four main joint ventures in the Pilbara region of Western Australia.
Under the new agreement, a trust entity will be established that is 51% owned and controlled by BHP, while GIP will pay USD2 billion in funding for a 49% stake.
BHP will pay the entity a tariff linked to the miner's shares of WAIO's inland power over a 25-year period.
The context: BHP said the deal does not impact its existing joint venture agreements. WAIO will continue along its long-term strategy, which aims to increase iron ore production to 305 million tonnes per year.
Completion of the deal with GIP is expected towards the end of the 2026 financial year, subject to regulatory approval.
What they said: "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," said BHP chief executive Mike Henry.
The source: ASX
