IOC and Rio Tinto Announce Plans for Capacity Expansion
03/18/2008 - The Iron Ore Co. of Canada and Rio Tinto will invest $500 million to increase IOC's annual production of iron ore concentrate to 22 million tonnes, beginning with a phase-one expansion program targeting as high as a 50% increase in production capability by 2011.
The Iron Ore Co. of Canada (IOC) and Rio Tinto have announced the approval of a $500 million investment to increase IOC's annual production of iron ore concentrate to 22 million tonnes. The investment is the first phase of an expansion program targeting as high as a 50% increase in production capability by 2011.
The companies said that work would commence immediately to expand IOC's mining and processing facilities in Labrador West and increase transportation capacity on its 418-km railway to its port facilities in Sept-Iles, Qué. The investment includes the purchase of new mining equipment, as well as the installation of a new crusher station in the mine and an autogenous grinding mill in the concentrator. A 6-km overland conveyor will also be installed to link the crusher and grinding mill together, and new locomotives and rail cars will be purchased to increase railway capacity.
The companies will make a decision on the remainder of the expansion program later this year, following the completion of feasibility studies that are currently underway. The programs will target a further increase total production to more than 25 million tonnes, including an increase in pellet production to 14.5 million tonnes.
IOC Chairman and Rio Tinto Iron Ore Chief Executive Sam Walsh said the decision [to expand] highlighted not only the value of Rio Tinto's global platform of iron ore production, but also the level of confidence in market conditions over the longer term.
"The iron ore market is as tight as it has ever been and our sustained and substantial reinvestment in our operations in Canada and worldwide demonstrates the confidence we have in that market," said Walsh. "The IOC expansion program emphasizes the Group's ability to increase supply from an existing strong base across several continents."
Iron Ore Co. of Canada (IOC), Canada's largest iron ore producer, is known globally for the high quality of its products. Its broad product range is sold globally to all segments of the steel industry including the high growth direct-reduction sector. As of the end of 2006, IOC had 962 million tonnes of iron ore reserves ((*)416 million tonnes on a product basis) and 3,155 million tonnes of iron ore resources ((*)1,370 million tonnes on a product basis) and significant exploration potential. ((*)source: 2006 Rio Tinto Annual Report)
Rio Tinto is the major shareholder of IOC (58.72%), along with Mitsubishi Corp. (26.18%), and Labrador Iron Ore Royalty Income Fund (15.10%).
Rio Tinto, a leading international mining group headquartered in the U.K., is focused on finding, mining, and processing mineral resources. Rio Tinto Iron Ore is headquartered in Perth, Western Australia, with Sam Walsh as Chief Executive. This investment is one of many being made in Canada by IOC's major shareholder Rio Tinto, which has activities in more than 40 countries worldwide, including mining developments and acquisitions in British Columbia, Northwest Territories, and Quebec.
