Rio Tinto to invest further USD 833 million in Pilbara Iron Ore Expansion

Rio Tinto's integrated Pilbara iron ore power and gas network will be upgraded with a USD 520 million investment. (Picture: Rio Tinto)

Rio Tinto is to invest USD 833 million (Rio Tinto share USD 706 million) in major power and fuel supply projects as part of its drive to substantially increase iron ore production capacity in Western Australia.

Melbourne (VIC), Australia – Rio Tinto's integrated Pilbara power and gas network will be upgraded with a USD 520 million investment and a further USD 313 million will be allocated to fuel infrastructure facilities.

The projects are needed to support annual production capacity of 283 million tonnes, a milestone Rio Tinto has targeted for 2013. The fuel infrastructure project will also help support the next phase of potential expansion, to 333 million tonnes per year in 2015.

Power Infrastructure

A USD 520 million (Rio Tinto share USD 417 million) upgrade of the integrated power and gas network will deliver an additional 120 megawatts to sustain the current 230 million tonnes per year capacity and support expansion to 283 million tonnes per year.

Two 40 megawatts open-cycle gas turbines will be installed as part of a new power station near the West Angelas mine site and a 40 megawatts open-cycle gas turbine will be built at the existing Yurralyi Maya Power Station near Dampier.

The investment also provides for associated power infrastructure such as substations, gas pipelines and transformers.

Fuel Facilities

The USD 313 million investment (Rio Tinto share USD 289 million) in fuel infrastructure will support the expansion programme to 283 million tonnes per year, and provide some of the capacity needed for expansion to 333 million tonnes per year.

On completion, the fuel network will have a total storage capacity of 100 million litres, with 56 million litres additional capacity at Parker Point port terminal at Dampier. Two new inland distribution hubs will also be created, removing the requirement for two trains to transport fuel from Port Hedland, some 400 kilometres to the north.

Expansion Schedule

Rio Tinto's schedule for expanding its integrated Pilbara operations is as follows:

• 225 million tonnes per year - current operating capacity
• 230 million tonnes per year by end of Q1 2012 - Dampier port incremental (in implementation)
• 283 million tonnes per year by end of H2 2013 - Cape Lambert 53 million tonnes per year increment (in implementation)
• 333 million tonnes per year by end of H1 2015 - Cape Lambert 50 million tonnes per year increment (in feasibility study)