Western Australia Iron Ore (WAIO) PFS: $88.30B NPV
BHP Group's Western Australia Iron Ore (WAIO) in Australia, Pilbara region, Western Australia has a Pre-Feasibility Study (PFS) outlining a pre-tax NPV of $88.30B.
BHP Group's Western Australia Iron Ore (WAIO) has reported Pre-Feasibility Study (PFS) results for the iron (fe) project in Australia, Pilbara region, Western Australia. The study headlines a pre-tax net present value of $88.30B at a 6.5% discount rate. It reflects BHP Group's (BHP) latest disclosed economics for the asset.
Economics. The pre-tax NPV is $88.30B using a 6.5% discount rate. Economics are based on US$86 per dmt for Platts 62% Fe Fines Index; US$103 per dmt for lump (FOB Port Hedland). Long-term iron ore price used to estimate mineral reserves..
Production and mine plan. The project envisions an open-pit operation. Average annual production is approximately 290 Mtpa iron ore capacity (Ore for Rail). Average head grade is 61.7% Fe (Total Mineral Reserves). Metallurgical recovery averages 100%.
Resources and ownership. The company holds a 85% interest in the project.
These figures are extracted from BHP Group's technical disclosures and reflect the most recent PFS on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Proven | 1,630 Mt | 62.2% Fe, 0.10% P, 3.2% SiO2, 2.0% Al2O3, 5.2% LOI | — |
| Probable | 1,960 Mt | 61.3% Fe, 0.09% P, 3.8% SiO2, 2.1% Al2O3, 5.7% LOI | — |
| Proven & Probable | 3,590 Mt | 61.7% Fe, 0.10% P, 3.6% SiO2, 2.1% Al2O3, 5.5% LOI | — |
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured | 1,090 Mt | 59.5% Fe, 0.11% P, 4.8% SiO2, 2.6% Al2O3, 6.8% LOI | — |
| Indicated | 3,320 Mt | 59.4% Fe, 0.13% P, 5.0% SiO2, 2.7% Al2O3, 6.6% LOI | — |
| Measured & Indicated | 4,400 Mt | 59.4% Fe, 0.12% P, 5.0% SiO2, 2.6% Al2O3, 6.7% LOI | — |
| Inferred | 10,410 Mt | 59.3% Fe, 0.12% P, 5.1% SiO2, 2.6% Al2O3, 6.8% LOI | — |
Our Analysis
- NPV pre-tax
- $88.30B
higher than 100% of 360 projects we track
- Study price assumption
- US$86 per dmt for Platts 62% Fe Fines Index; US$103 per dmt for lump (FOB Port Hedland). Long-term iron ore price used to estimate mineral reserves.
Pre-tax NPV of $88.30B ranks this above 100% of the 360 projects we track, but that percentile is less a compliment than a warning about how to read the number. Iron ore megaprojects in the Pilbara are not scarce; the scarcity is in the margins at the bottom of the cycle. The study's price deck, US$86 per dmt for fines and US$103 per dmt for lump, is the entire ballgame. A PFS narrows cost estimates to a plus or minus 25% band, but the revenue line swings far wider with any sustained move in the benchmark. The NPV's rank tells you the asset is real, not that the return is assured.
The funding picture is unusually comfortable for a project of this scale. The NPV sits at roughly 0.4x a US$218.22B market cap, meaning the company could absorb a construction overrun without breaking its balance sheet. That is the rare case where the capital intensity question is not the constraint. Most peers we track would need to dilute, syndicate, or pause dividends to fund a build of this size; this one does not. The practical hurdle is not money, it is sequencing: a project already in production suggests the growth capex is being staged, but the market will still discount the NPV until the next tranche of spend is sanctioned.
The Pilbara is the right jurisdiction for this commodity, mining-friendly, established infrastructure, and a regulatory path that is predictable if slow. That lowers the risk premium embedded in the discount rate, which is why the NPV can be read with more confidence than a comparable asset in a higher-risk setting. The question that decides whether this works is not geological or financial, it is price discipline. If the long-term iron ore price assumption holds near the study's level, the returns are credible. If the cycle turns before the next expansion phase is committed, the NPV rank will compress quickly, and the market cap cushion only helps if management is willing to wait out the cycle rather than force the build.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.