Pilbara’s largest iron ore mine for construction in 2016

Rio Tinto’s brownfields expansion at Yandicoogina will be up
and running by 2017, with federal approvals.

Documents submitted to the government in recent days
outlined plans for the new “Yandicoogina Pocket and Billiard South Iron ore
Mine”, a project which will last 16 years and begin construction in 2016.

Rio Tinto said the new project, with an output of 70 million
tonnes per year, would make a significant contribution to the company’s production
volumes.

The new mine would outstrip production of the company’s
largest mine in the Pilbara region, BHP’s Mt Whaleback, which produces around
55 mtpa.

Increased production by the iron ore giant will continue to
depress prices and make market conditions harder for junior producers, with a
five-year low price of $77.70 posted on Tuesday.

Rio Tinto chief executive Sam Walsh has previously saidhe was not concerned by the rapid decline in iron
ore prices, with Rio as the lowest cost producer in Australia.

“Regardless of what the price is, we will be
the last one standing,” he said.

Rio first announced plans for a $3.1 billion expansion in 2012, with $2 billion
going towards extending the life of Nammuldi iron ore mine and $1.1 billion
used on works to expand the company’s Cape Lambert port and rail facilities.

The
company will now focus on the second phase of its expansion which will increase
iron ore production to 360 million tonnes per annum by the end of 2015.

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