Rio Tinto today announced major project investments in Australia and overseas aimed at growing the company already under takeover speculation.
A US$991m investment will be made to improve coal production at its Bowen Basin Krestal mine in Australia, and US$300m will be spent to develop the Eagle mine in Michigan, US, to make it the only primary nickel provider in the US.
Rio Tinto says it is also looking into developing another nickel mine in Sulawesi, Indonesia, which will have an initial operation of 46,000t per year.
Rio Tinto announced its aggressive growth strategy on 26 November, which, according to Rio Tinto's Australian-based managing director of strategy Doug Ritchie, these investments are a part of.
"The extension [of the Krestal Mine] will enable us to tap into 112 million tonnes of high quality hard and semi-hard coking coal and thermal coal for export," Ritchie says.
Krestal's output will largely reach the Asian market, where demand for coal is growing.
The US Eagle mine project will allow Rio Tinto to also expand its offering with nickel, according to Rio Tinto copper group chief executive Bret Clayton.
"Eagle gives Rio Tinto a valuable opportunity to enter the market for nickel, a key input into stainless steel, demand for which is rising strongly led by the development of new infrastrucuture in developing economies, as well as rising demand for consumer products and the development of associated processing plant equipment," Clayton says.
Eagle is a 4.1 million tonne high-grade nickel resource in a highly prospective region for further nickel discoveries.
"Our exploration team discovered Eagle in 2002 and we are now reviewing over 450,000 acres of mineral title we have in the area," Clayton says.
These are not the only investment Rio Tinto has made in the last year, however.
Rio Tinto has also poured US$563m into the underground development of the Diavik Diamond Mine in Canada, US$2.4m into the new Mesa A/Warramboo and Brockman-4 mines in Western Australia and US$350m into the Hope Downs iron ore expansion among other projects.
By Penny Jones
