Rio Tinto’s 360-million-tpy expansion in Pilbara will cost much less

Rio Tinto, the world’s second-largest iron ore miner, is going ahead with its expansion in Australia to 360 million tpy at a “significantly lower capital cost per tonne than originally planned”.

Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.

“The breakthrough pathway we have identified, combining brownfield expansions and unleashing low-cost productivity gains, means we will deliver the expansion at an estimated capital cost of more than $3 billion below previous expectations,” its ceo Sam Walsh announced on Thursday November 28.

The majority of the growth, from a base run rate of 290 million tpy by the end of first half of 2014 to 330 million tpy in 2015, will be delivered in the next two years.

A series of low-cost brownfield expansions will bring on early tonnes to feed the expanded infrastructure currently being developed and Rio Tinto has on Thursday approved a capital expenditure of $400 million to support the brownfield expansions.

Mine production capacity will increase by more than 60 million tpy between 2014 and 2017.

Rio Tinto is still evaluating its options to optimise the next stage of “the 360 programme”.

It said expansions will be achieved primarily through a combination of expanding production at existing mines and securing further low-cost productivity gains, including the greenfield Silvergrass mine.

The investment decisions on the greenfield Silvergrass and Koodaideri mines, in Western Australia, have been deferred until the third quarter of 2014 and until 2016, respectively, at the earliest, due to the early tonnes from the brownfield expansions, Rio Tinto said.

The phase two expansion for port, rail and power infrastructure to achieve the 360 million tpy output is scheduled for completion in the first half of 2015.

The expansion is subject to government and joint venture approvals.

“This investment is driven by the attractive long-term fundamentals for iron ore which are underpinned by urbanisation and income growth in the developing world, particularly China. By delivering these additional tonnes we will capture a greater share of demand,” Andrew Harding, Rio Tinto Iron Ore’s ceo, said.

What to read next
General Motors (GM) is investing $650 million to develop the Thacker Pass mine in Nevada, the largest known source of lithium in the US and the third largest in the world
Electrolysis processes developed by Boston Metal and Electra that eliminate the need for coal in steel production could be key to a net-zero emissions future for the metallics industry, attendees learned at Fastmarkets’ conference on January 17-19 in Dallas
Low supply, strong demand to spur scrap prices higher in Feb, market says
US deep-sea ferrous export prices from the East Coast to Turkey have plateaued, with a Turkish mill purchasing a cargo at prices stable from the last-reported sale
The current shortage of some higher purity grades of aluminium, such as P0610, and the robust demand for units should maintain the higher differential to prices for P1020-grade aluminium, market sources told Fastmarkets on Monday January 30
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.