Japan's Strategic Iron Ore Expansion in Australia: Mitsui and Itochu's Positioning for Asia's Steel Demand Surge

Japan's Mitsui & Co. and Itochu Corporation have solidified their foothold in the global iron ore supply chain by acquiring indirect stakes in BHP Group's Ministers North iron ore deposit in Western Australia. Mitsui now holds a 7% interest, while Itochu secures an 8% stake, with BHP retaining 85% ownershipMitsui to Acquire Interest in the Ministers North Iron Ore Deposit^[1]. This move aligns with their long-term strategies to ensure stable resource supply for Asia's steel markets, a sector poised for significant realignment as demand shifts from China to India and Southeast Asia.

Strategic Rationale: Securing Supply Amid Asia's Steel Demand Shifts

The investment in Ministers North is a calculated response to evolving steel demand dynamics in Asia. According to the OECD Steel Outlook 2025, China's steel demand is projected to decline by 5–7 million tonnes annually over the next decade due to structural economic shifts and a contracting construction sectorOECD Steel Outlook 2025^[2]. Conversely, India and Southeast Asia are emerging as growth engines. India's steel demand is forecasted to grow by 8–9% in 2025, driven by infrastructure and manufacturing expansion, while Southeast Asia is expected to see 3–4% growthOECD Steel Outlook 2025^[2].

Mitsui and Itochu's acquisition of stakes in Ministers North—located in the low-cost Pilbara region—positions them to capitalize on these trends. The deposit's integration with existing infrastructure and mines is expected to enhance cost competitiveness, a critical advantage as Asian buyers seek reliable, affordable iron ore suppliesMitsui to Acquire Interest in the Ministers North Iron Ore Deposit^[1]. This aligns with Mitsui's broader strategy of providing industrial business solutions, particularly in resource security, and Itochu's focus on reducing dependency on volatile market conditionsJapan's Mitsui, Itochu to Acquire Interests in Australia Iron Ore Mine^[3].

Mitigating Risks and Leveraging Synergies

The investment also reflects a response to global overcapacity and trade tensions. China's steel exports surged to 118 million tonnes in 2024, prompting trade actions and concerns about market distortionsOECD Steel Outlook 2025^[2]. By securing a stake in a high-grade, low-cost asset like Ministers North, Mitsui and Itochu can hedge against these risks while supporting their trading and investment activities. The deposit's development, pending a final investment decision by June 2026, is expected to benefit from synergies with BHP's existing operations, further strengthening the joint venture's resilienceMitsui to Acquire Interest in the Ministers North Iron Ore Deposit^[1].

Long-Term Implications for Japan's Steel Industry

Domestically, Japan's steel industry faces challenges, including deflationary pressures and labor shortages. A 2025 report notes that Japan's steel demand is unlikely to escape a deflationary cycle, prompting companies to prioritize overseas expansionProduction and Technology of Iron and Steel in Japan during 2024^[4]. Mitsui and Itochu's Australian investments align with this trend, enabling them to diversify their supply chains and tap into growth markets. Additionally, the companies may explore green steel technologies or digital transformation initiatives to align with global sustainability goalsProduction and Technology of Iron and Steel in Japan during 2024^[4].

Conclusion

Mitsui and Itochu's strategic acquisition in BHP's Ministers North deposit underscores their proactive approach to navigating Asia's evolving steel landscape. By securing a stake in a low-cost, high-grade asset, they position themselves to meet surging demand in India and Southeast Asia while mitigating risks from China's overcapacity and trade tensions. As the global iron ore market adjusts to these dynamics, their investment in Australia's Pilbara region exemplifies a forward-looking strategy to sustain long-term competitiveness.