Rio Tinto to invest $2.15 billion in major expansion of Corumbá iron ore mine in Brazil

30 July 2008

Mining giant Rio Tinto will invest $2.15 billion in a major expansion of its iron ore mine in Corumbá, Brazil, boosting annual capacity of the mine more than six-fold from 2 million tonnes per annum to 12.8 million tonnes, with new production commencing in the fourth quarter of 2010. The company will also undertake a feasibility study, to be completed by mid-2009, for a Phase II expansion that would take capacity to 23.2 million tonnes per annum.

The Corumba investment brings to nearly $11 billion the total capital expenditure that Rio Tinto has committed since 2003 to develop its iron ore business. Rio Tinto outlined a global pathway to grow iron ore production to more than 600Mtpa from 179Mtpa in 2007 late last year. Rio Tinto's attributable share of 320 Mtpa and 420 Mtpa of iron ore production at its Pilbara operations is approximately 80 per cent to 85 per cent. Rio Tinto's attributable share of its global iron ore production beyond 600 Mtpa is approximately 85 per cent.

Mining at Corumbá is relatively simple, with no blasting required and extremely shallow waste material covering the ore. The existing 2 Mt/a operation will continue unaffected by the new greenfields operation.

The expanded operation will continue to be multi-jurisdictional: a new northern river port will be established at Albuquerque in Brazil, barging operations will operate through the international zone of the River Paraguay; a new southern river port will be constructed at Agraciada in Uruguay (all 100% Rio Tinto), and trans-shipping operations will be conducted in the international waters of the Rio de La Plata, located 350 kilometres away from Agraciada. The trans-shipping is necessary to enable larger Panamax and Capesize vessels to be loaded.

The expansion of Corumbá, which produces high-quality blast-furnace lump and direct reduction products, will capitalise on increasing demand for iron ore in South America and the Middle East, and increase Rio Tinto's presence in Europe.

Rio Tinto chief executive Tom Albanese said, "This is a very significant step forward in our drive to extend iron ore operations beyond the Pilbara region in Western Australia. The development of Corumbá reinforces our capability to expand capacity rapidly to match increased demand wherever it occurs.