Press Release

Rio Tinto invests US7 million in infrastructure and mine studies towards 320 Mt iron ore capacity by 2012

18 June 2008   

Rio Tinto has approved the funding of US7 million (Rio Tinto share US2 million) in infrastructure and studies for mine expansions as part of its drive to increase the annual capacity of its Pilbara operations to 320 million tonnes by 2012.

Of the package, US8 million (Rio Tinto share US3 million) will fund the early commencement of infrastructure works and acquisition of long-lead items such as heavy mobile equipment - key components of this expansion.  

The balance of US9 million is directed to a study of a new iron ore mine on the Western Turner Syncline, near Tom Price, following successful completion of the prefeasibility assessment. The proposed mine would eventually ramp up to 29 Mtpa capacity, feeding into existing Tom Price processing plant, with production scheduled to commence in Q4 2010.

The US7 million package is an important step in the first stage of the conceptual pathway, first set out in November 2007, that could take Rio Tinto’s Pilbara production to 420 Mtpa and global production to beyond 600 Mtpa in the future.

Tom Albanese, chief executive of Rio Tinto said, “Against a backdrop of strong demand and constrained supply, it is vital that we progress plans to deliver more iron ore to market faster than before. That requires the strategic early acquisition of long-lead items, leveraging off existing industry leadership to reduce time to market of future expansions.

“We start with an unrivalled position in the Pilbara, with a 1,300-kilometre railway network linking our mines and three port terminals already in place. This positions us well to continue to deliver exceptional growth,” he said.

Rio Tinto Iron Ore chief executive Sam Walsh said early planning and acquisitions were vital to maintain an aggressive time-to-market schedule. “The huge number of major resource projects planned or underway in Western Australia has resulted in enormous competition for the supply of key materials and production slots,” he said. “This ensures we will continue to lead the industry in completing projects in a timely, efficient manner.”

The early works involve significant infrastructure for port operations at Cape Lambert, including the development of a heavy off-lift wharf facility; relocation of existing gas and power lines to enable commencement of stockyard works; and the securing of production slots for dumper castings and slew bearings.

Included in this investment is US million for the advanced development of studies for an additional eight Mtpa capacity for the 52 Mtpa Yandicoogina mine in the eastern Pilbara. This will enable orders to be placed on construction camp and long-lead components to install the recently purchased second stacker.