Mitsui & Co. ( MITSF ) has announced an acquisition of a 40% stake in the Rhodes Ridge iron-ore project in Australia. The Japanese conglomerate, in which Warren Buffett holds an 8% stake, will acquire a 25% stake from VOC Group for $3.34 billion and a 15% stake from AMB Holdings for $2 billion.

Following the transaction, AMB Holdings will retain a 10% stake, while Rio Tinto remains the project's operator with a 50% interest.

"The project is in Western Australia, where we have been involved in mining development since the 1960s and have the most expertise. It will further strengthen our business foundation," CEO Kenichi Hori said per Reuters.

Located in the mining-oriented Pilbara region, Rhodes Ridge is one of the world's largest undeveloped iron-ore deposits, with an estimated 6.8 billion tons of mineral resources. The full feasibility study will follow after the completion of the pre-feasibility stage later this year.

Rio Tinto welcomed Mitsui's ( MITSF ) involvement, citing their longstanding partnership in the Robe River joint venture located in the same region. The new mine will benefit from its proximity to existing infrastructure, including rail networks and port facilities, which will help lower capital expenditures and operational risks. 

The British-Australian mining leader anticipates its first production at Rhodes Ridge in 2030, with an initial output of 40 million tons annually. Thus, Mitsui's ( MITSF ) 40% stake will entitle it to a share of 16 million tons at the outset, eventually exceeding 40 million tons as production ramps up. The company plans to integrate Rhodes Ridge output into its existing iron ore portfolio, which includes investments in Brazilian miner Vale and other joint ventures with Rio Tinto and BHP.

This investment aligns with Mitsui's ( MITSF ) Medium-term Management Plan 2026, prioritizing industrial business solutions and the stable supply of essential resources. The company expects the project to contribute significantly to its long-term earnings, with operating cash flow projected to increase by 100 billion yen ($659 million) initially and up to 250 billion yen after expansion.

Pending regulatory approvals, the deal is expected to close by March 2026.

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