Rio Tinto, the world's third-largest mining company, has earmarked a further $3.4 billion (Rio Tinto share $2.9 billion) for the expansion of its iron ore mines in Western Australia's Pilbara region to meet the strong future demand from Asia, especially China.
The Anglo-Australian miner today said that it expects to raise output from its mines in Pilbara to 283 million tonnes a year by the second half of 2013, up from the current 225 million tonnes.
"Today we are announcing another significant milestone in our drive towards a more than 50-per cent 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," said Sam Walsh, chief executive of Rio Tinto Iron Ore and Australian operations.
London-based Rio Tinto will spend $2.2 billion to extend the life of its wholly-owned Nammuldi iron ore mine to increase output capacity to 283 million metric tons a year.
It will also spend a further $1.2 billion on initial work for port and rail at Cape Lambert, which will increase capacity to 353 million tons, it said in a statement.
The Nammuldi project will extend the mine's life by 14 years, at a production rate of approximately 16 million tonnes a year.