Rio Tinto in $230 million Pilbara iron ore expansion drive

Rio Tinto, the Anglo Australian mining giant today announced that it will invest $230 million in expanding its Pilbara iron ore project in Western Australia by 10 million tonnes (mt) a year by 2012 to cater to the rising demand from Asia.

"This investment will demonstrate our ability to bring incremental capacity on line at very low capital cost and without disrupting existing operations or schedules,'' said Rio Tinto's CEO, Sam Walsh.

The London and Melbourne-based miner will expand the Dampier Port, which will result in an additional five mt annual capacity, taking its total annual capacity in Pilbara to 230 mt annually in Q1 2012.

This investment is in addition to $91 million approved in early 2010 for a first 5 mt annual expansion to 225 mt capacity, which is currently in implementation.

Rio Tinto's Parker Point facility at Dampier port is its single largest and busiest port operation. With this incremental expansion Rio Tinto will be able to maintain production and expansion schedules in order to give timely delivery of additional iron ore supply.

"This incremental capacity will add substantial value and will position our integrated Pilbara operations well as we finalise plans on how best to move to a 330 mt capacity and beyond," said Walsh.

The port upgrade, wholly funded by Rio Tinto, will increase the Parker Point facility's shiploading capacity, with associated increases in rail stock. It is the second stage of Rio Tinto's 330 mt growth programme.

Earlier, Rio had said that it would invest $790 million to expand its iron ore operations in Western Australia and $170 million in the Simandou iron ore project in Guinea, where it recently signed a joint venture with China's Chinalco.