Rio Tinto has settled out of court with engineering group Monadelphous over a fire at a Western Australian iron ore site in 2019.

The miner was seeking $493 million in loss and damages due to the fire at Cape Lambert on January 10, 2019.

Most of the amount was based on the inability to process iron ore after the blaze.

Cape Lambert is one of two ports Rio uses to ship iron ore from the Pilbara mining region.

Rio alleged a Monadelphous subsidiary, which was maintaining services at the site, caused the fire. Nobody was seriously injured.

The engineering group denied the claims.

Monadelphous on Friday said a confidential settlement had been agreed, and would be covered by insurance.

Investors appeared pleased the uncertainty was over and sent Monadelphous shares higher by 4.68 per cent to $11.29 at 1358 AEST. They had been as high as $11.36 earlier.

Rio shares were higher by 0.86 per cent to $118.72.