Rio Tinto will invest more than $300 million to ensure a water supply for its Pilbara iron ore operations.
The coastal water supply project, which will involved the construction of a new borefield and pipeline system, will be completed by the middle of 2013, and provide enough water, around ten gigalitres annually, to accommodate the expansion of annual production up to 333 million tonnes.
The miner will build, own and operate the borefield, which will be located in the lower Bungaroo Valley, south east of Pannawonica.
Under its proposal Rio will give up its current priority entitlements to the Millstream water supply, and in return the Government of Western Australia has agreed to amendments to its secondary processing obligations.
Sam Walsh, Rio’s iron ore chief executive said “the decision is a major boost to our operational capability and an important investment to support our Pilbara expansion. We will ensure the future reliability of our water supply without any interruption to current operations.