Pilbara Capacity Extension

Rio Tinto adds USD 790 million for Pilbara Capacity Extension

05.08.2010 | Deskman: Marcel Dröttboom

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Rio Tinto is to invest a further USD 790 million in the Pilbara capacity extension. (Picture: Rio Tinto)

Melboune (VIC), Australia – Rio Tinto is to invest a further USD 790 million in the Pilbara capacity extension to increase the annual capacity of the iron ore operations in the Pilbara to 330 million tonnes. This brings total investment funds approved in recent weeks to USD 1 billion.

The Pilbara 330 expansion centres on increasing the Rio Tinto’s port at Cape Lambert from its current annual capacity of 80 million tonnes to 180 million tonnes by 2016. This will be achieved through construction of a new 1.8 kilometre jetty and four-berth wharf to run parallel to the existing jetty and four-berth wharf.

On 14 July, Rio Tinto announced that it would spend USD 200 million on dredging works for the Cape Lambert expansion. The investment announced today comprises USD 375 million (Rio Tinto share 100 percent basis) for marine works related to the construction of the new wharf, and USD 415 million (100 percent basis) for the procurement of long lead items such as pile and marine structure and on-shore earthworks and machines.

The early construction works are dependent upon a number of government and other approvals, including that of the Robe River joint venture partners. A final investment decision is expected to be made by the end of this year. Rio Tinto’s planned growth of its Pilbara iron ore operations to 330 million tonnes per year capacity consists of the following steps:

• 225 million tonnes per year by Q1 2011 - Dampier port systems efficiencies (in implementation).
• 230 million tonnes per year by Q2 2012 - Dampier port incremental gains (in feasibility study).
• 280 million tonnes per year by H1 2014 – Cape Lambert B 1st 50 million tonnes per year increment (now in feasibility study).
• 330 million tonnes per year by H1 2016 – Cape Lambert B 2nd 50 million tonnes per year increment (pre-feasibility completed.

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Rio Tinto chief executive Iron Ore and Australia Sam Walsh said the new investment highlighted Rio Tinto’s intention to forge ahead with the expansion. “Rio Tinto has a proven track record of managing large-scale iron ore development projects, and has successfully implemented three significant increases in port capacity in the past seven years - Dampier to 140 million tonnes (in two stages) and Cape Lambert to 80 million tonnes,” he said. “As with previous expansions, a key factor in this project will be minimising any disruption to existing operations and production schedules. We are confident this will be achieved.”

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