Rio Tinto Group, the world’s third-largest mining company, and partners approved a $3.4 billion expansion of its iron ore operations in Western Australia as part of a plan to boost output by more than 50 percent.
Rio will spend $2.2 billion to extend the life of the Nammuldi iron ore mine in the state’s Pilbara region to increase output capacity to 283 million metric tons a year, the London-based company said today in a statement. A further $1.2 billion will be invested on initial work for port and rail at Cape Lambert, needed to boost capacity to 353 million tons, it said.
“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,” Sam Walsh, Rio’s iron ore and Australia chief executive officer, said in the statement. Rio Tinto’s goal to increase the size of its iron ore operations in Western Australia by more than 50 percent is “on track,” he said.
Production capacity of 283 million tons will be reached in the second half of 2013, Rio said today. The Nammuldi expansion will deliver first iron ore in the third quarter of 2014, the company said.