Rio Tinto accelerates Pilbara Iron Ore Expansion with USD

Rio Tinto is accelerating its iron ore expansion programme in the Pilbara region of Western Australia with USD 676 million. (Picture: Rio Tinto)

Rio Tinto is accelerating its iron ore expansion programme in the Pilbara region of Western Australia with USD 676 million of funding for early works and procurement. Capacity extension to 333 million tonnes is now expected to be reached in 2015.

Melbourne (VIC), Australia – The USD 676 million investment is part of a five-year programme started in 2010 to increase capacity in the Pilbara by 50 per cent. The investment (Rio Tinto share USD 350 million) will be used to bring forward engineering work for the longest lead-time components of port and rail infrastructure, without increasing the overall cost of the expansion programme.

Rio Tinto chief executive, Iron Ore and Australia, Sam Walsh said “Thanks to this faster pace of expansion we will be bringing extra tonnes to market earlier. The demand outlook continues to be strong with supply lagging elsewhere in the industry and we are seeing new supplies proving slower to materialise than predicted. We are taking the opportunity to bring forward the next phase of our major capacity expansion to reap the benefits early and at no additional cost”.

The early port works principally comprise the assembly of additional construction accommodation, the continuation of dredging, marine works and stockyard earth works contractors and the procurement of key equipment. The rail-related funding will enable early engineering and accelerated procurement of long-lead items such as rail plant.

Studies will continue through this year to determine the best mine development path to meet this schedule, as will studies for supporting infrastructure such as utilities, fuel and accommodation.

Rio Tinto’s integrated operations expansion to 333 million tonnes per year is being achieved through this sequence:

• 225 million tonnes per year by end of the first quarter of 2011 - Dampier port systems efficiencies (completed)
• 230 million tonnes per year by end of the first quarter of 2012 - Dampier port incremental (in implementation)
• 283 million tonnes per year by end of the second half of 2013 – Cape Lambert B 1st 53 million tonnes per year increment (in implementation)
• 333 million tonnes per year in the first half of 2015 – Cape Lambert B 2nd 50 million tonnes per year increment (early works approved)