Mining giants Rio Tinto and BHP Billiton agreed to set a new joint venture for their Western Australian iron ore operation in a deal.

It is expected that both companies can save at least US$10 billion.

The deal indicates both companies share assets in West region equally and includes BHP handing over US$5.8 billion for Rio equity. This deal was also reported after Rio’s turned down China’s Chinalco’s US$19.5 billion proposal.

Head of BHP said it this cooperation will help both companies to combines those operations for more than a decade. Rio said the deal will need shareholder approval.