Thu, Jun 21, 2012 - Page 15 News List

Rio Tinto commits US$4.2 billion to lift iron ore output

Bloomberg

Rio Tinto Group, the world’s second-largest exporter of iron ore, has committed US$4.2 billion to expanding mines in Australia’s Pilbara and the Simandou operation in Guinea as Chinese demand grows.

It will spend US$3.7 billion expanding a mine, building new port berths and extending railways in Western Australia as part of a plan to boost output to 353 million tonnes a year by 2015, the London-based company said in a statement yesterday. It also allocated US$501 million to building rail and port facilities at its Simandou development project in Guinea.

Rio Tinto, which ranks behind Brazil’s Vale SA for iron ore exports, is spending at least US$15.6 billion beefing up mines and ports. China, the world’s largest steel producer, will boost output by 43 percent to 1 billion tonnes by 2030 as it continues to urbanize, according to Rio Tinto.

“We continue to see positive prospects for medium to long-term iron ore demand driven by ongoing growth in Chinese consumption,” Sam Walsh, the chief executive officer of RioTinto’s iron ore unit, said in the statement.

Rio Tinto in April said that it withdrew from talks to take part in a A$9 billion (US$9.17 billion) port expansion in Queensland where some of its coal mines are located, citing economic volatility and higher costs.

“We are directing investment to projects that will generate the most attractive returns for shareholders and are resilient under any probable macroeconomic scenario,” Chief Executive Officer Tom Albanese said in the statement.

The project approvals announced yesterday will not affect plans for US$16 billion in capital spending for this year, Rio Tinto said.

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