Rio Tinto pumps $3.4bn into Pilbara
Sydney - Anglo-Australian miner Rio Tinto on Wednesday said it will pump a further $3.4bn into expanding iron ore operations in the Pilbara region of Western Australia to meet strong demand from Asia.
The mining giant, which posted record iron ore production of 65 million tonnes in the fourth quarter of 2011, said it was aiming to increase operations in the Pilbara by 50%.
"We believe we have the best quality iron ore expansion projects anywhere in the world," said Rio Iron Ore and Australia chief executive Sam Walsh.
"They are high return, low-risk investments that are highly value-adding for shareholders.
"Today we are announcing another significant milestone in our drive towards a more than 50% increase in the size of iron ore operations in Western Australia.
"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."
The investment comprises $2.2bn on work to extend the life of its Nammuldi mine and $1.2bn on early works needed for the expansion of the Cape Lambert port and rail facilities.
The project would increase production capacity to 283 million tonnes of iron ore per annum by the second half of 2013, Rio said.
Rio Tinto's key rival BHP is also investing huge sums of money in beefing up mining capacity in the Pilbara, recently announcing a further $917m in pre-commitment funding to ramp up its iron ore operations.