BHP, BlackRock's Global Infrastructure Partners to Establish Power Network Trust in Australia for $2 Billion

04:41 AM EST, 12/09/2025 (MT Newswires) -- BHP Group (BHP.L, BHG.JO) secured $2 billion in funding from BlackRock's Global Infrastructure Partners as part of a deal to establish a trust entity for the mining giant's 85% holding in Western Australia Iron Ore's inland power network. BHP will own and control 51% of the trust, while the infrastructure investor will hold the remaining 49%, according to a Tuesday release. In return, BHP will pay the new joint venture a tariff for its share of the power network over 25 years. The listed mining company noted that it will maintain full operational control and ownership of Western Australia Iron Ore's assets. The partnership will also not impact existing joint venture deals related to the assets, along with BHP's obligations under contracts with the State of Western Australia. The group then emphasized its long-term goal of boosting annual iron ore production to 305 million tonnes. "This arrangement is an example of BHP's disciplined approach to capital portfolio management. It strengthens our balance sheet flexibility, supports long-term value creation, and enhances BHP's shareholder value," BHP Chief Financial Officer Vandita Pant said. The transaction's completion is anticipated toward the end of fiscal 2026, pending necessary conditions, such as approval from Australia's Foreign Investment Review Board. The mining company said the deal's net proceeds will be managed under its capital allocation framework. RBC Capital Markets held a positive view of the deal, noting the agreement boosts the group's balance sheet flexibility without affecting operational control. "Capital recycling at a below-[weighted average cost of capital] valuation 1) improves capital efficiency, 2) releases value tied up in lower-return infrastructure, and 3) enhances BHP's optionality to fund growth without undermining operational control. We view the transaction as incrementally positive and expect further monetisation optionality across BHP's broader infrastructure footprint over time," the research firm wrote. By Tuesday midday, BHP's stock was marginally lower on the London and Johannesburg exchanges.