Rio Tinto to invest $2bn in Indian iron ore project

6 March 2012 (Last Updated March 6th, 2012 18:30)

Australia's mining giant Rio Tinto plans to invest $2bn to set up an iron ore mining project in the Indian state of Orissa.

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Australia's mining giant Rio Tinto plans to invest $2bn to set up an iron ore mining project in the Indian state of Orissa.

Rio Tinto has a 51% stake in joint venture company (JV) Rio Tinto Orissa Mining, through which it intends to develop iron ore deposits in the Keonjhar district.

State-owned Orissa Mining Corporation (OMC) owns a 44% equity interest in the JV while the remaining stake is held by India's National Mineral Development Corporation.

The companies expect to begin work on the project once it receives approvals from the state government

Rio Tinto iron ore division chief executive Sam Walsh was quoted by the Business Standard as saying that he expects to increase the iron ore project's capacity to 15 million tonnes per annum (mtpa) to cater to clients.

"We will bring the technology and environment safety system and we will obviously be using the local people in the project," said Walsh.

"The programme remains on track and we are bringing new iron ore production on stream at a time when demand from Asian markets is forecast to grow strongly, while industry supply growth remains constrained."

Caption:Rio Tinto intends to develop iron ore deposits in Keonjhar district in Orissa, India. Photo: Courtesy of Rio Tinto.