Rio Tinto invests $749mn in Pilbara iron ore deposit
Rio Tinto has announced a $749mn investment in its Greater Tom Price operations to help sustain production capacity in its iron ore business in the Pilbara, Western Australia.
The Anglo-Australian miner said the investment in the Western Turner Syncline Phase 2 mine will facilitate mining of existing and new deposits and includes construction of a new crusher as well as a 13-kilometre conveyor, reports Reuters.
The new conveyor system will help lower greenhouse gas emissions from the mine by 3.5%, compared with road haulage, the company said in an exchange filing.
Construction will start in the first quarter of 2020, with first ore from the crusher expected in 2021.
“Production of high-quality Brockman ore will support the company’s flagship Pilbara Blend, which continues to be the preferred baseload product for China’s steel mills,” Rio Tinto said.
The company said the project is expected to deliver internal rate of return with a capital intensity of about $25 per tonne of production capacity.
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Rio Tinto’s iron ore chief executive Chris Salisbury said the company’s iron ore business continued to deliver “industry-leading margins as we drive performance from our mines”.
“This significant investment in the Greater Tom Price hub is one of a pipeline of high-quality, low-cost options that will underpin production of our flagship Pilbara Blend product well into the future,” he said.
The discovery of high-grade iron ore at Mount Tom Price in the Pilbara region of Western Australia, more than 50 years ago, almost doubled Australia’s reported reserves of the mineral and led to the creation, over time, of a suite of mines.
It was the foundation on which Australia’s largest iron ore enterprise was built, an enterprise that has helped to make Australia the largest seaborne exporter of the mineral.
From the discovery work at Mount Tom Price, Rio Tinto developed a basic exploration model that was used throughout the 1960s and into the early 1970s, and resulted in the discovery of much of Rio Tinto’s current high-grade iron ore.