Rio to invest $US1.6b in Hope Downs WA
Monday August 30, 2010, 6:08 pm
au.biz.yahoo.com
Rio Tinto says it will invest $US1.6 billion ($A1.78 billion) to develop the Hope Downs 4 iron ore project in Western Australia and link it with existing rail, power and port infrastructure in the Pilbara.
The new open-cut mine will have an annual capacity of 15 million tonnes of high-quality iron ore, with first production expected in 2013.
The project, 30km north of Newman, will include a village for more than 600 staff, mine dewatering, an open cut shovel and truck mining fleet and wet ore processing infrastructure.
The cost to develop the mine is estimated at $1.33 billion and will be shared between Rio Tinto (US$607 million) and joint venture partner Hope Downs Iron Ore Pty Ltd.
Rio Tinto will also spend $US425 million ($472 million) on rail, rolling stock and power infrastructure required for the mine, which will link to Rio's existing rail and port infrastructure via the Lang Hancock Railway.
"This demonstrates the extensive high-grade resources Rio Tinto can bring on line to sustain our current output at 225 million tonnes a year, an equally important consideration as we seek to expand our Pilbara production rate to 330 million tonnes a year by 2015," Rio Tinto chief executive Sam Walsh said.
Rio Tinto said earlier in the month, as it reported first half profit, that its capital spending was expected to reach $13 billion over the next 18 months, driven by strong Chinese demand for iron ore.
The company said a large portion of the capital spending would be spent within Australia as it ramped up iron ore production from the current 220 million tonnes a year.
The latest spending plan follows Rio Tinto's announcement in early August that the company planned to invest $US790 million to expand the capacity of the port at Cape Lambert.
Rio Tinto says the project ore body has proven iron ore reserves of 73 megatonnes and probable reserves of 64 megatonnes.
Construction will begin early next year, subject to necessary regulatory and other approvals.
Fat Prophets resources analyst Nick Raffan said Rio had foreshadowed making the investment at the time of its results announcement.
"This is part and parcel of going from current production levels up to 330 million tonne a year," he said.
Mr Raffan said given the human resource demands of the project, it would likely intensify competition for skilled staff that was re-emerging as a challenge for the mining and infrastructure sectors.
Source:By Nicole Stevens |
