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Mining giant Rio Tinto has formed a joint venture with China Baowu Steel Group to develop the Western Range iron ore project in Western Australia's Pilbara region.

Rio Tinto, which will take up a controlling 54% stake in the project, will invest $1.3bn to develop the mine, with Baowu putting in an additional $700.0m.

The FTSE 100-listed group highlighted that its share of capital costs was already included in previous guidance of roughly $9.0bn-10.0bn for both 2023 and 2024.

Construction of the mine was forecast to begin in early 2023, with the duo set to build a primary crusher and an 18-kilometre conveyor system linking it to the existing Paraburdoo processing plant. First production from the site was projected to take place in 2025.

Rio Tinto and Baowu also agreed to enter into an iron ore sales agreement at market prices, covering a total of up to 126.5m tonnes of iron ore over approximately 13 years.

Rio Tinto Iron Ore chief executive Simon Trott said: "This is a very significant milestone for both Rio Tinto and Baowu, our largest customer globally.

"The development of Western Range represents the commencement of the next significant phase of investment in our iron ore business, helping underpin future production of the Pilbara Blend, the market benchmark."

Reporting by Iain Gilbert at Sharecast.com

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