The iron ore giants recently agreed to a $US116 billion ($143.8 billion) merger of their Pilbara operations, foiling Chinese major Chinalco`s $US19.5 billion plan to save Rio from its debt burden, The Australian reports.
While still a long way from completion, the advantages of the tie-up are starting to emerge.
Most of the synergies are obvious, but integration will not be easy, especially on the technology front.
BHP has been aiming for an iron ore deal with its bitter rival for 10 years.
While BHP has a strong balance sheet and ambitious expansion plans in the vibrant region, Rio Tinto is far ahead in modernising and automating its operations.
Sharing technology is one of the chief features of the massive merger deal, which values the proposed iron ore operation at more than $140 billion - making the merger vehicle the second-biggest company in Australia behind BHP.
The joint venture agreement states that "the owners (BHP and Rio) will license on a non-exclusive, royalty-free basis to the joint venture all intellectual property and technology used in the respective West Australian iron ore businesses and grant the joint venture the rights to make enhancements".
One analyst said bringing BHP up to speed on Rio`s technology would not be easy, because they used completely different systems and Rio was more advanced in automation.
But he said that if the iron ore joint venture passed the regulatory hurdles, the new alliance would benefit from the work Rio has done on its mine of the future plans. "Another positive for the new joint venture is that expenditure on new technology will be reduced as a combined effort," the analyst said.
In contrast to Rio`s firm belief in the mine of the future concept, BHP has been relatively cool about its plans and not as aggressive in moving to an automated system. However, in July last year the world`s largest miner did team up with Caterpillar with the aim of having driverless trucks onsite as early as 2012.
BHP is aiming to trial the massive automated trucks at its North American mines in early 2010.
Rio`s initial motivation for automation plans was the difficulty of attracting and retaining labour during the boom years, with the miner emphasising that it could achieve its expansion ambitions without issues of how to get more and more people into remote locations and the increasing costs of getting them there.
But the group`s mine of the future hopes took a hit in January, when Rio announced it was postponing a $US371million driverless-train plan that was designed to expand Pilbara iron ore capacity.
As the urgency to expand abated, so did the drive to increase the robot fleet.
Despite its well-known debt problems after its questionable Alcan acquisition and the automated-train delay, Rio has managed to push forward with its future mine robot truck plans and last month launched a 15-month automation trial.
One-time rival BHP Billiton has not only realised a long-held dream to merge with Rio`s lucrative iron ore operations, but it has now propelled itself three years forward to piggyback on Rio`s technology dream.
Read more at The Australian.
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