The Baby Hope deposit sits about 4km south-west of the Hope Downs 1 South deposit and immediately north of the Lang Hancock rail line.

The development will help sustain existing capacity at the Hope Downs 1 operation.

"This investment will ensure sustainable production levels at the Hope Downs 1 operation and is a clear demonstration of our continuing commitment to the people of Western Australia and the joint venture partnership," Rio Tinto Iron Ore chief executive Chris Salisbury said.

"Together, we have played an instrumental role in developing the Pilbara and remain committed to pioneering new ways to innovate and improve our business for the future."

The JV plans to retrofit 28 existing haul trucks at the operation with Autonomous Haulage System technology by 2020, as well as three production drills.

"As we introduce autonomous technology across the business we continue to work closely with our employees to develop their career pathways. To date, we have successfully redeployed or upskilled employees impacted by automation and we would expect this trend to continue with the extension of this technology at Hope Downs," Salisbury said.

Hancock executive chairman Gina Rinehart thanked Rio for investing in Baby Hope and the other Hope Downs mines. Hope Downs is named after Rinehart's mother.

"As Hancock and some at Rio know, I have been pushing to see the development of Baby Hope, and I am excited that now the Baby Hope mine will be a welcome contributor to the future success of Hope Downs," she said.

Hope Downs 1 and 4 produced 46.9 million tonnes of iron ore in 2017.