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Investing.com-- Japanese trading house Mitsui & Co (TYO:8031) will acquire a 40% stake in Rio Tinto (ASX:RIO) operated Rhodes Ridge iron ore project for $5.3 billion, both companies said in separate announcements on Wednesday.
The acquisition involves two transactions. Mitsui has signed a definitive agreement to acquire a 25% stake from VOC Group Limited for $3.3 billion. Additionally, Mitsui has signed a heads of agreement with AMB Holdings to acquire a further 15% stake for $2 billion.
Both transactions are subject to regulatory approvals and other closing conditions, with the VOC Group deal expected to be finalized by March 2026, Mitsui said.
Australia’s Rhodes Ridge, one of the world’s largest undeveloped iron ore deposits, holds estimated mineral resources of 6.8 billion tons.
Production is slated to begin by 2030, with Mitsui’s equity share of output initially projected at 16 million tons annually, rising to over 40 million tons as the project expands, Mitsui said in a statement.
Mitsui’s current iron ore production stands at 61 million tons annually, making the acquisition a significant boost to its long-term earnings base.
The project will be operated by Rio Tinto, with expected synergies from its proximity to Mitsui’s existing Robe River iron ore operations, including shared infrastructure such as rail and port facilities.
Sydney-listed Rio shares closed 1.2% higher on Wednesday, while Mitsui shares were trading nearly 1% lower.
Following the acquisition, Mitsui will allocate an additional 400 billion yen to its Management Allocation framework, increasing its balance to 550 billion yen. This will enable the company to pursue further strategic investments and additional shareholder returns.