The Pilbara's most profitable iron ore producer, Rio Tinto, has provided a rare insight into why Gina Rinehart and Peter Wright's heirs spent so much money fighting over a slice of the Rhodes Ridge project.
Rio used its annual report to disclose that Rhodes Ridge's total resource had increased by 213 million tonnes to 5.3 billion, most of it with an average iron grade exceeding 62 per cent.
The iron ore spot price, for 62 per cent cargoes to China's Tianjin port, was yesterday worth $US110.10 a tonne, which means the incremental in-situ volume at Rhodes Ridge alone has a nominal value of more than $23 billion.
Mrs Rinehart and the heirs of Mr Wright, the former business partner of her father Lang Hancock, spent a decade fighting over ownership of the 50 per cent of Rhodes Ridge not owned by Rio. Mrs Rinehart ultimately proved unsuccessful although her Hancock Prospecting is yet to hand over title to 25 per cent of Rhodes Ridge to Wright Prospecting.
Rio is busy expanding some of its existing Pilbara mines, rather than focusing on new projects such as Rhodes Ridge, to achieve an annual production capacity of 360 million tonnes.
Rhodes Ridge's scale means a development will eventually transform Rio's footprint.
Rio's annual resource update also highlights the high grade of its iron ore portfolio at a time when most new discoveries in the Pilbara struggle to maintain iron content above 58 per cent.
Most of the extra Rhodes Ridge tonnes are relatively low-grade Brockman process ore, which have increased from 473 million tonnes at 56.6 per cent to 636 million tonnes at 56.8 per cent following more drilling and modelling work. But that is masked by two million tonnes, at 62.9 per cent, of Brockman ore and 2.3 billion tonnes, grading 62.1 per cent, of Marra Mamba ore.
·Andrew Forrest has again shown his faith in iron ore's future, spending $4.9 million acquiring one million Fortescue Metals Group shares.
His on-market buying, disclosed yesterday, came last week when nervousness in iron ore markets caused a big sell-off among mining stocks, including Fortescue. The latest purchase takes Mr Forrest's interest in Fortescue to 1.03 billion shares.
Fortescue yesterday closed down 7Â¢ at $4.91.