Rio Tinto awards $200 million mining contract to indigenous joint venture

Rio Tinto has awarded a major new mining contract in its Pilbara iron ore operations to a joint venture between native title holders the Eastern Guruma and mining services company NRW.

The $200-million contract to build, mine and transport iron ore from Rio Tinto's Western Turner Syncline deposit is the first significant mining joint venture for the Eastern Guruma people, and continues the comprehensive Rio Tinto commitment to indigenous contracting in the Pilbara region.

NRW and Eastern Guruma will build a haul road and truck the ore 15 kilometres to the Tom Price mine for processing and blending with other Pilbara Blend stocks. Required regulatory approvals are being finalised and production is expected to start in July 2010, delivering six million tonnes of high-grade (>60% Fe) iron ore per year.

The four-year contract has been designed to increase Eastern Guruma equity in the joint venture from 25 to 35 per cent as the group builds capacity in mining services. Mandated employment levels will rise each year giving an average of 27 per cent Aboriginal employment across the four-year contract. It also includes a $6 million component specifically for training the Eastern Guruma to develop stand-alone proficiency, and there is potential for the project to become a 50:50 JV.

Rio Tinto iron ore chief executive Sam Walsh said, "This is a great initiative. It enables a local Aboriginal contractor as part of the joint venture to develop and mine the Western Turner Syncline deposit. It will allow the Eastern Guruma people to develop capacity in mining services, and have increased participation in the resource development taking place on their country."

"It is also an important production step for us. Western Turner Syncline will provide high-grade iron ore which will be processed and blended using existing infrastructure in Tom Price and, together with upgrades of rail and port capacity, will support an increase in our production capacity in the Pilbara to 230 million tonnes a year."