Iron ore giant Rio Tinto shared Wednesday that it is ramping up its iron ore expansion in the Pilbara by spending US$676 million for early works and procurement on mines, ports and railways. With the extra funds, capacity will increase to 333 million tonnes a year by the first half of 2015, six months earlier than planned as part of Rio Tinto’s five-year plan to increase capacity in the Pilbara by 50 per cent.
Started in 2010, the five-year plan is being ramped up by the $676 million to bring forward engineering work for the longest lead-time components of port and rail infrastructure, without increasing the overall cost of the expansion programme.
Rio said the funding would be spent on additional port construction, accommodation, dredging, marine works, early rail engineering and procurement of key rail and port equipment at its Cape Lambert site.
Commenting on the latest investment, Rio Tinto chief executive, Iron Ore and Australia, Sam Walsh said, “Thanks to this faster pace of expansion we will be bringing extra tonnes to market earlier. The demand outlook continues to be strong with supply lagging elsewhere in the industry and we are seeing new supplies proving slower to materialise than predicted.”
The news comes after a recent announcement that Rio would spend $US2.6 billion to bring on new production at the Marandoo and Hope Downs 4 mines. The company has also identified that its Yandicoogina Junction South West and Western Range would need more investment to produce an expected 36 million tonnes of iron ore a year.