China Baowu Group is weighing a stake acquisition in one of BHP's iron ore mines, according to Reuters citing people familiar with the matter.

Sources said the potential transaction would cover a 15-25% equity interest in the Jimblebar mine. No valuation or further financial details have been disclosed. Discussions are ongoing and no final decision has been made, with no guarantee that a binding agreement will be reached.

BHP holds an 85% controlling stake in Jimblebar, while Japanese trading houses Itochu and Mitsui hold the remaining minority interests.

In a stock exchange filing responding to the reports, BHP stated it has a long track record of asset partnerships and routinely evaluates opportunities to deliver long-term shareholder value. The miner added its Western Australia iron ore operations remain a core component of its asset portfolio.

For the financial year 2025-26 (ending June 30, 2026), Jimblebar produced roughly 62.5 million tonnes of iron ore, representing around one quarter of BHP's total iron ore output.

Reuters reported that some bankers familiar with BHP's operations have raised questions over whether the potential deal aligns with the miner's strategy to maximize profits from iron ore sales to Chinese customers. In April, BHP resolved a contractual dispute with state-owned China Mineral Resources Group (CMRG) after more than six months of negotiations.

Mining firms typically sell equity to bring in partners and diversify risks for greenfield projects, yet such divestments are uncommon for mature, smoothly operating producing mines.

Baowu has a history of cooperation with Australian miners. Most notably, it struck a $2 billion joint development deal with Rio Tinto in 2022 for a mine project in Western Australia's Pilbara region.