Western Australia's state government has approved the expansion of Rio Tinto’s Silvergrass iron ore mine near Tom Price in the Pilbara region.
The approval will allow construction to begin at the mine with immediate effect, with an expected capital expenditure of A$441m ($336m).
Western Australia State Development Minister Bill Marmion said: "This project will create about 500 jobs during construction and an additional 25 operational positions once the expanded mine is fully operational.
"Expanding production from Silvergrass will allow Rio Tinto to sustain the quality of their Pilbara blend product and maintain current production levels.
"The expansion provides a significant boost to the Western Australian resources sector and shows our state continues to be an attractive place for large-scale investment."
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The proposal to expand Silvergrass mine was approved under the existing agreement between Rio Tinto and the state government.
Expansion of the mine is expected to add ten million tonnes of capacity.
The investment will be used to replace road haulage with a better conveyor system that links the Silvergrass operations to Rio Tinto’s existing processing plant at Nammuldi and would lower mine operating costs.
Silvergrass is a satellite deposit adjacent to Rio Tinto’s Nammuldi mine. It is part of the Greater Nammuldi precinct, located 70km north-west of Tom Price.
The low-phosphorus Marra Mamba ore from the mine is treated at the Greater Nammuldi processing plant.