Can Pilbara remain the world’s top iron ore hub through 2035?

The Pilbara region of Western Australia, home to industry titans such as Rio Tinto plc (LSE: RIO, NYSE: RIO), BHP Group Limited (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Hancock Prospecting, has long been synonymous with iron ore dominance. In 2023 alone, Pilbara mines exported over 945 million tonnes of iron ore, accounting for nearly 40% of global seaborne supply and generating over AU$12 billion in royalties for the Western Australian government. Yet with new high-grade entrants such as Simandou in Guinea nearing production, green steel initiatives accelerating, and ESG mandates tightening, questions are emerging about the Pilbara’s long-term grip on global iron ore leadership.

Australia’s advantage has historically been built on scale, consistency, and political stability. But the decade to 2035 could prove more challenging than the previous two. While Pilbara remains the undisputed production heavyweight, structural shifts in ore preferences, decarbonisation mandates, and cost pressures are beginning to reshape strategic priorities for miners, steelmakers, and governments alike.

What risks are emerging for Pilbara’s dominance?

Among the most talked-about competitive threats is the long-delayed Simandou project in Guinea, which is being jointly developed by Rio Tinto, China Baowu Steel Group, Winning Consortium, and other Chinese backers. With production targets of up to 60 million tonnes per annum and ore grades exceeding 65% Fe content, Simandou is positioned as a premium alternative to Pilbara Blend, which averages 62%. Analysts expect initial shipments by 2028–2029, potentially ramping up to full capacity by the early 2030s.

Though smaller in volume than Pilbara’s current output, Simandou’s higher-grade product is more aligned with emerging trends in green steel production. Direct Reduced Iron (DRI) furnaces require purer ore inputs, and Chinese and European steelmakers are increasingly seeking supplies that reduce the carbon footprint of steelmaking. This trend presents both an opportunity and a warning to Australian miners, whose iron ore is generally less suitable for low-emission technologies unless heavily upgraded or beneficiated.

Fortescue Metals Group’s executive chairman Andrew Forrest has warned that Australia risks “sleepwalking” into obsolescence if it fails to align with the future of steel. He and others in the industry have argued that Pilbara’s dominance cannot be taken for granted, particularly if supply from Africa, Brazil, and the Middle East accelerates to meet the specifications of green steel producers.

How are Rio Tinto, BHP, and Fortescue adapting?

In response to these structural shifts, Rio Tinto has intensified its reinvestment in sustaining infrastructure, notably through replacement projects like Western Range, Brockman Syncline 1, and the Rhodes Ridge feasibility study. Combined, these projects underpin a production target of approximately 130 million tonnes per annum and extend the operational life of key hubs like Paraburdoo. Rio Tinto also recently completed a renewable diesel trial that slashed Scope 1 emissions by 27,000 tonnes across its Pilbara operations.

BHP, meanwhile, continues to invest in its South Flank operation and is examining beneficiation strategies to make its ore more compatible with DRI processes. The mining giant has committed to electrifying haul fleets, integrating battery-electric trucks, and developing carbon capture readiness at some of its legacy hubs. BHP executives, however, have flagged increasing labour costs and regulatory complexity as headwinds for sustaining competitive output levels in Pilbara.

Fortescue Metals Group is perhaps the most aggressive among the three in pivoting toward a green steel future. The miner is investing in hydrogen-ready infrastructure, DRI pilots, and is actively exploring magnetite processing upgrades at its Iron Bridge and Eliwana projects. Fortescue also plans to transition its entire Pilbara mining fleet to battery-electric or green hydrogen propulsion within the decade, signalling its intention to align operations with the expectations of ESG-focused investors and regulators.

What are Pilbara’s enduring advantages?

Despite rising competitive pressure, the Pilbara retains several entrenched advantages. It boasts unmatched logistics infrastructure, including hundreds of kilometres of privately operated heavy-haul rail, world-class port handling capacity, and automated processing hubs. This integration enables miners to move material from pit to ship with unrivalled efficiency, keeping delivered costs to China as low as US$30–40 per tonne.

The region also benefits from a highly skilled workforce, stable regulatory frameworks, and long-standing commercial relationships with Asia’s largest steelmakers. China Baowu, Nippon Steel, and South Korea’s POSCO remain closely aligned with Pilbara miners via long-term offtake agreements and joint ventures. Moreover, existing blending strategies allow Pilbara miners to tailor grades for specific mill requirements, maintaining product desirability even in shifting market conditions.

Western Australia’s government, through the Pilbara Energy Transition Initiative, is also investing in regional power infrastructure, including renewable microgrids, hydrogen corridors, and grid integration programs. These initiatives aim to ensure that future expansions in the Pilbara are not only high-output but also low-carbon.

Could ESG and heritage reform reshape investment strategy?

Environmental and cultural governance are playing an increasingly central role in determining Pilbara’s future. Rio Tinto’s destruction of the Juukan Gorge in 2020 remains a cautionary tale, and new projects like Western Range now follow co-designed Social, Cultural and Heritage Management Plans (SCHMPs) with Traditional Owners such as the Yinhawangka people. This governance shift, while welcomed by Indigenous communities and ESG investors, adds both procedural complexity and higher project gestation times.

In parallel, institutional investors—including ESG-focused asset managers and sovereign wealth funds—are becoming more assertive in how they evaluate project approvals, sustainability disclosures, and community engagement metrics. Failure to adhere to these expectations could limit access to capital or trigger activist campaigns, as seen with Palliser Capital’s recent push for governance reform within Rio Tinto.

What does the long-term outlook suggest?

From a macroeconomic standpoint, global steel demand is expected to grow moderately through 2035, driven by infrastructure renewal, urbanization in Asia and Africa, and the construction needs of the energy transition. According to estimates by the World Steel Association, global steel use could reach 2.2 billion tonnes by 2030. Pilbara’s high-volume output will likely remain necessary for this baseline demand, particularly if supply from new entrants is delayed or disrupted.

Still, analysts caution that the margin premium may shift toward high-grade ores over the coming decade. If Pilbara’s output continues to lean toward 61–62% Fe blends, it may face increasing pricing pressure unless paired with downstream beneficiation or environmental performance offsets.

Equity analysts have maintained a cautious but constructive outlook on Rio Tinto and BHP. They argue that Pilbara’s low-cost position and expansion pipeline provide defensibility, but warn that diversification into copper, lithium, and value-added iron products will be critical to sustaining valuation multiples through 2030 and beyond.

What will define Pilbara’s leadership in the next decade?

Pilbara’s continued reign as the world’s top iron ore hub is not assured—but it remains highly probable if current reinvestment, innovation, and decarbonisation trends hold. Its competitive moat, while facing intensifying pressure from high-grade African deposits like Simandou and emerging South American operations, is still among the deepest in the global mining landscape. This advantage is rooted in industrial-scale infrastructure, long-term customer relationships across Asia, vast proven reserves, and a demonstrated track record of operational efficiency underpinned by automation and technology leadership.

However, the nature of global iron ore demand is evolving. Pilbara’s dominance has historically been linked to the scale and consistency of its 61–62% Fe Pilbara Blend ore, which suits traditional blast furnace operations. As demand shifts toward higher-grade inputs needed for low-carbon steelmaking processes—particularly Direct Reduced Iron (DRI) and electric arc furnace (EAF) technologies—Pilbara producers must pivot toward beneficiation, pelletisation, and magnetite upgrades if they are to remain relevant in a green steel economy.

The next decade will likely be defined by how quickly and effectively Pilbara miners can close the ore quality gap while simultaneously decarbonising their own operations. Electrification of haul trucks, use of renewable energy in mining and processing operations, and carbon-neutral logistics will be table stakes for future competitiveness. Rio Tinto’s renewable diesel trials, BHP’s battery-electric fleet initiatives, and Fortescue Metals Group’s hydrogen truck pilots are early but essential signals of a sector preparing for systemic change.

Social license to operate will be another defining factor. Following the Juukan Gorge destruction in 2020, there is little tolerance—either from regulators or institutional capital—for projects that fail to engage respectfully with Traditional Owners. Co-designed heritage management plans, equity-sharing models, and deeper ESG disclosures are becoming not just regulatory requirements, but strategic imperatives. Projects like Western Range demonstrate that such frameworks can be successfully implemented, but Pilbara operators will need to institutionalise these practices across all future expansions and sustaining operations.

Access to capital will also play a pivotal role in defining Pilbara’s leadership. Investors are becoming increasingly selective, favouring projects and jurisdictions that align with ESG criteria and contribute meaningfully to energy transition supply chains. Mining houses that can deliver iron ore with lower embedded emissions, higher grade profiles, and stronger community governance will likely benefit from lower capital costs and broader investor participation.

Finally, the ability to move further downstream—into green iron, pellet feed, and potentially even finished steel products—may offer Pilbara players a path to value chain expansion. Rather than relying solely on volume, Rio Tinto, BHP, and Fortescue may need to explore joint ventures or technology partnerships that enable them to offer low-carbon or zero-carbon steel inputs tailored to the evolving demands of global infrastructure, automotive, and construction sectors.

In short, Pilbara’s leadership through 2035 will not rest on historical dominance alone. It will depend on agility, capital discipline, stakeholder alignment, and technological evolution. If the region’s mining majors can deliver on these fronts, Pilbara is not only well-positioned to retain its status as the world’s premier iron ore hub—it may also set the global benchmark for what responsible and forward-looking mining should look like in the decades ahead.