Rio Tinto to invest $4.2bn to expand global iron ore business

19 June 2012 (Last Updated June 19th, 2012 18:30)

Rio Tinto will spend an additional $4.2bn to expand its iron ore operations across Western Australia and Guinea.

Rio Tinto Pilbara mine

Rio Tinto will spend an additional $4.2bn to expand its iron ore operations spread across Western Australia and Guinea.

The miner will spend $3.7bn to extend the life of its Pilbara iron ore mine, which will increase its production capacity to 353 million tonnes per year by 2015.

Over the next four years, Rio Tinto will complete the port and rail elements of the project, which will involve adding two berths on the new Cape Lambert jetty and wharf.

Meanwhile, a total of $570m will be spent on a new gas-fired power station at Cape Lambert.

Rio Tinto Iron Ore chief executive Sam Walsh said the company is continuing to see positive prospects for medium to long-term iron ore demand, driven by ongoing growth in Chinese consumption.

"Our Pilbara expansion is already well underway, positioning us to capture the opportunities of this market environment," said Walsh.

"Further investment will be made as the Government of Guinea progresses its financing strategy and grants approvals for the next steps in developing rail and port infrastructure."

The company will also invest $501m for further infrastructure development, including detailed design studies, early works and long-lead items at the Simandou iron ore project in Guinea, where first commercial production is planned in 2015.

Rio Tinto plans to stage funding approvals with its partners for a ramp up of the operation.

The works and plans remain subject to joint venture and regulatory approvals, which are expected later this year.


Image: Rio Tinto investment will extend the life of its Pilbar iron ore mine in Australia. Photo: Courtesy of Rio Tinto.