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Rio Tinto Invests to Accelerate Pilbara Iron Ore Expansion

06/16/2011 - Rio Tinto is accelerating its iron ore expansion program in the Pilbara region of Western Australia with US$676 million of funding for early works and procurement. Capacity expansion to 333 million tonnes per year is now expected in the first half of 2015, six months earlier than planned.

Rio Tinto is accelerating its iron ore expansion program in the Pilbara region of Western Australia with US$676 million of funding for early works and procurement. Capacity expansion to 333 million tonnes per year is now expected in the first half of 2015, six months earlier than planned. This is part of a five-year program started in 2010 to increase capacity in the Pilbara by 50%.
 
The US$676 million (Rio Tinto share US$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 program.
  
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.
 
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 materialize 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."
 
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.
 
The schedule for Rio Tinto's integrated operations expansion to 333 million tonnes per year is as follows:
 
  • 225 million tonnes per year by end of Q1 2011; Dampier port systems efficiencies (completed)
 
  • 230 million tonnes per year by end of Q1 2012; Dampier port incremental (in implementation)
 
  • 283 million tonnes per year by end of H2 2013; Cape Lambert B 1st 53 million tonnes per year increment (in implementation)
 
  • 333 million tonnes per year in H1 2015; Cape Lambert B 2nd 50 million tonnes per year increment (early works approved).
 
Rio Tinto is a leading international mining group headquartered in the U.K., combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Ltd., which is listed on the Australian Securities Exchange. Its business is finding, mining, and processing mineral resources. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe, and southern Africa.