Investing.com-- Rio Tinto Ltd (ASX: RIO ) and Hancock Prospecting will invest a combined $1.6 billion to expand the Hope Downs 2 iron ore project in Western Australia’s Pilbara region, the two companies said on Tuesday.

Rio will invest $800 million in the joint venture, which it holds in equal partnership with Hancock. The venture will aim to mine iron ore deposits in the Hope Downs 2 project.

The project is expected to have a combined annual production capacity of 31 million tonnes, and has now received all government approvals to proceed, Rio said. Output from the project will be transported to Hope Downs 1 for processing, with first ore expected by 2027.

Rio said over 950 jobs will be created during construction, and that the project will sustain a workforce of about 1000 full-time roles at Greater Hope Downs.

The project represents Rio expanding further in the Pilbara region, which is a key iron ore-rich region in Australia. Rio is the world’s biggest iron ore producer by sales, and is targeting a capacity of 345 to 360 million tonnes per annum from its Pilbara business.

Rio and Hancock had first established Hope Downs in 2006, and had started production at the project in 2007. Hancock Prospecting belongs to Australian billionaire Gina Rinehart.

Rio’s Australian shares rose 2.1% after the deal.