Australia's two biggest miners Rio Tinto and BHP on Thursday announced that they were exploring a new collaboration in the Pilbara that could unlock up to 200-million tonnes of additional iron-ore, as the majors look for low-cost ways to extend the life of mature assets and squeeze more value from existing infrastructure.

Under two non-binding memoranda of understanding, the rivals will examine options to jointly develop ore at their neighbouring Yandicoogina and Yandi operations in Western Australia’s iron-ore heartland. The proposals include collaboration on Rio Tinto’s Wunbye deposit and a potential arrangement for BHP to supply ore from its Yandi Lower Channel Deposit to Rio Tinto for processing at Rio’s existing wet plants.

If progressed, the arrangements would build on a 2023 agreement that allowed the companies to mine the Mungadoo Pillar – ore previously stranded along a shared tenement boundary.

Rio Tinto iron-ore CE Matthew Holcz said the discussions were focused on maximising value with minimal new spending.

“By working smarter, we can better leverage existing infrastructure to unlock additional production with minimal capital requirements,” Holcz said.

“Together we will extend the life of these operations, create additional value, and further support Western Australian jobs and local communities.”

For BHP, the talks underline a broader push to lift productivity from its Pilbara operations as it balances sustaining iron-ore earnings with growing investment in future-facing commodities such as copper and potash.

“This is a clear example of productivity in action - unlocking new opportunities by making the most of our existing resources,” BHP WA Iron Ore asset president Tim Day said.

“By sharing our expertise and infrastructure we will create new value and deliver benefit to our people, partners, customers and communities.”

The companies have agreed to progress an initial conceptual study, followed by an order-of-magnitude assessment to test the economics and practicalities of the proposals. Subject to a final investment decision, first ore from the deposits could be produced early in the next decade.

Any move beyond studies would require regulatory and joint-venture approvals, as well as engagement with Traditional Owners.