If you've been buying BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) shares you'll have little to complain about this past year.
That's because shares in both S&P/ASX 200 Index (ASX: XJO) mining giants hit one-year-plus highs earlier in January.
In late morning trade on Friday, BHP shares are giving back some of those gains, down 0.8% at $49. Despite that slip, the BHP share price remains up 22.6% over 12 months. Atop those capital gains, BHP shares also trade on a fully-franked 3.5% trailing dividend yield.
Rio Tinto shares are heading the other way today, up 0.8% and trading for $148.36 apiece. This sees the mining stock up 24% since this time last year. Rio Tinto shares trade on a fully-franked trailing dividend yield of 4%.
Now, here's how Australia's biggest miners aim to improve shareholder returns in the long term by partnering up in Western Australia.
Image source: Getty Images
BHP and Rio Tinto shares cooperating?
On Thursday, the ASX 200 miners released a joint announcement revealing that they've agreed to work together in the Pilbara. The companies will join forces to extract up to 200 million tonnes of iron ore at their neighbouring Yandicoogina and Yandi iron ore operations.
Rio Tinto shares closed up 0.4% on Thursday, while the BHP share price jumped 2.6%.
The companies inked two non-binding Memoranda of Understanding. These will explore the potential for them to collaborate on developing Rio Tinto's Wunbye deposit. The non-binding agreements also would see BHP supply its Yandi Lower Channel Deposit ore to Rio Tinto for processing at its existing wet plants, under agreed commercial terms.
It's not the first time the two mining giants have worked together.
In 2023, Rio Tinto and BHP agreed to mine the Mungadoo Pillar. This allowed them to mine ore from their shared tenure boundary that was inaccessible prior to their cooperation.
What did management say?
Commenting on the collaboration that could support Rio Tinto shares longer term, Rio Tinto Iron Ore CEO Matthew Holcz said:
By working smarter, we can better leverage existing infrastructure to unlock additional production with minimal capital requirements. Together we will extend the life of these operations, create additional value, and further support Western Australian jobs and local communities.
BHP WA Iron Ore Asset President Tim Day added:
This is a clear example of productivity in action, unlocking new opportunities by making the most of our existing resources. By sharing our expertise and infrastructure we will create new value and deliver benefit to our people, partners, customers and communities.
Subject to a final investment decision, the ASX 200 miners expect first ore from both deposits in the early 2030s.
