Rio Tinto to spend $11 bn in Pilbara iron ore expansion

Rio Tinto, the world's third-largest miner is planning to spend $11 billion next year to increase its Pilbara iron ore production by more than 50 per cent over the next five years.

The investment comes after the Anglo Australian miner uncovered 2 billion tonnes deposits through new drilling results and ongoing assessment of assets in the Pilbara, Western Australia.

The additional 2 billion resources uncovered in the Pilbara will add to its current base of 14.4 billion tonnes of mineral resources and 2.8 billion tonnes of ore reserves.

Sam Walsh, chief executive, iron ore business and all Australia, said that the expanded resource base would help underpin Rio Tinto's development of its Pilbara operations to an annual capacity of 333 million tonnes in 2015.

"The ongoing technical and study work carried out by Rio Tinto's iron ore group has led to further increased confidence in Rio Tinto's Resource position in the Pilbara," he said.

While posting a record first-half profit in August, Rio Tinto had said that it would spend $13 billion on capital expenditure for the 18 months to December 2011. But yesterday the company lowered its current year capex spending to $4 billion with an increase to $11 billion next year.