BHP Group said on Tuesday that BlackRock-owned Global Infrastructure Partners will invest $2 billion into Western Australia Iron Ore’s inland power network, marking one of the most significant recent moves by a major miner to recycle capital out of low-risk infrastructure and push it back into growth.
The agreement carves out WAIO’s inland power assets into a new entity in which BHP will hold a 51 percent stake and GIP the remaining 49 percent. Under the structure, BHP will pay the new entity a tariff tied to its share of WAIO’s inland power use over a 25-year period. The Australian miner added that operational control will remain fully with BHP, ensuring continuity in how the network supports its massive Pilbara iron ore operations.
The deal landed well with analysts. “It’s a great deal that will help BHP with its capital recycling,” said CLSA’s Baden Moore in Sydney, adding that he hopes to see “more of this from BHP as they pursue growth.”
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The company’s shares pared early losses after the announcement and were recently trading flat.
Chief Financial Officer Vandita Pant said the structure reflects “BHP’s disciplined approach to capital portfolio management,” adding that it strengthens balance-sheet flexibility, supports long-term value creation, and enhances shareholder value. The push comes as the mining sector grapples with higher decarbonization costs, the need for new supply in iron ore and critical minerals, and a tougher funding environment for large greenfield mining projects.
The investment arrives at a moment when the world’s biggest miners are reassessing how much capital they want tied up in long-duration infrastructure such as power networks, rail, port capacity, and transmission lines. These assets are essential to operations but can tie up billions that could otherwise be deployed into exploration, expansions, or acquisitions. Investors on the other side are hungry for precisely these kinds of low-risk assets that offer stable, contracted returns.
That shift in thinking has been evident across the sector. Rio Tinto CEO Simon Trott said last week that the company had identified multiple infrastructure assets it does not need to own outright and would explore partnerships and divestments. The world’s largest iron ore producer, like BHP, is preparing for a more capital-intensive decade as ore grades decline, energy requirements climb, and governments push miners harder on emissions.
The GIP investment provides immediate liquidity for BHP, especially at a time when iron ore remains profitable but volatile, and when long-term decarburization plans require billions in spending. WAIO is among the world’s largest integrated mining operations, and its inland power network is critical to both energy reliability and the transition toward cleaner electricity sources. Structuring the asset as a tariff-based infrastructure play allows BHP to keep control while freeing capital to support expansions or cushion balance-sheet pressures from price swings in commodities.
This approach is believed to also give large miners a clearer path to partner with infrastructure specialists who can manage and optimize long-term capital needs while miners focus on operating performance and growth. For global funds like GIP it offers a foothold in Australia’s iron ore backbone at a time when long-dated infrastructure assets with predictable cash flows are in high demand.
BHP said the deal will not affect any existing joint-venture agreements within its Australian operations. But the move underlines a broader rethinking underway in the mining world about what needs to sit on miners’ balance sheets — and what can be monetized without undermining operational control.
With competitors already mapping out divestments and partnership opportunities, BHP’s agreement with GIP signals that the next phase of capital strategy in the mining sector may be less about outright ownership and more about finding ways to unearth value from the infrastructure that keeps the world’s biggest mines moving.