This article first appeared on GuruFocus.

Rio Tinto (NYSE:RIO) and BHP (NYSE:BHP) are coming together for one of their biggest collaborations in years, agreeing to jointly tap up to 200 million tonnes of iron ore in Western Australia's Pilbara region.

The two miners signed non binding agreements to look at developing neighboring deposits and sharing infrastructure across their Yandicoogina and Yandi operations. Instead of spending heavily on new projects, the focus is on getting more out of what's already there, including potentially developing Rio Tinto's Wunbye deposit and processing ore from BHP's Yandi Lower Channel through Rio's existing wet plants.

• Warning! GuruFocus has detected 9 Warning Signs with RIO.
• Is RIO fairly valued? Test your thesis with our free DCF calculator.

Executives from both companies framed the move as a practical response to rising costs and declining ore grades across the Pilbara. Rio Tinto iron ore chief Matthew Holcz said the partnership allows both sides to unlock extra production with minimal capital spending, while BHP's Tim Day called it a clear example of productivity gains through cooperation.

The Pilbara remains one of the world's most important iron ore regions, supplying steelmakers across Asia. The tie up also builds on a 2023 agreement that opened up mining along a shared boundary that was previously off limits, showing how rivals are finding common ground as industry pressures grow.