BHP Billiton (BHP.US) has agreed to sell its 85% stake in a power network company that supplies electricity to its large-scale iron ore mining operations in Western Australia's Pilbara region. The $2 billion deal will transfer ownership to Global Infrastructure Partners (GIP), a BlackRock-affiliated limited partnership. GIP will acquire a 49% stake in the Western Australian Iron Ore Inland Power Network, while the mining giant will retain proportional payment obligations over the next 25 years.
The transaction comes as BHP seeks to free up capital for growth opportunities beyond its core iron ore business, particularly in copper expansion. CEO Mike Henry stated that the agreement "enables BHP to secure funding while maintaining operational and strategic control of the energy network supporting its iron ore operations." The Perth-based miner will retain full oversight of the system, which includes the Yarnima gas-fired power station and over 400 kilometers (249 miles) of transmission lines and substations.
BHP, along with other major miners like Rio Tinto (RIO.US), has been divesting infrastructure assets to raise capital for growth investments. The Australian iron ore producer first announced this strategy in August, pledging to redirect infrastructure funding toward higher-return growth projects. Rio Tinto made similar remarks during its capital markets day last week.
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