Rio Tinto approves $2bn investment in premium iron ore

Rio Tinto operations in the Pilbara. Copyright © 2018 Rio Tinto.

Rio Tinto plans to sustain production of its high-grade iron ore products through a $US1.55 billion ($2.1 billion) investment in two Robe River joint venture projects in the Pilbara, Western Australia.

The miner, which holds 53 per cent of the JV, will continue to produce its premium Pilbara Blend iron ore and Robe Valley lump and fine products in the coming years by developing the projects.

Rio Tinto, with JV partners Mitsui and Nippin Steel & Sumitomo Metal, will spend $US967 million to develop the Mesa B, C and H deposits at Robe Valley, and $US579 million to develop Deposits C and D at the existing West Angelas operation.

It expects to start construction of both projects next year, once approvals have been gained, with an estimated 1200 jobs to be created during this phase.  The projects are forecast to reach production in 2021.

Both projects will have a technology focus, with Rio Tinto planning to retrofit 34 of its haul trucks with Autonomous Haulage System (AHS) technology.

Rio Tinto Iron Ore chief executive Chris Salisbury said the development at West Angelas would help sustain production of the Pilbara Blend, the industry’s benchmark premium iron ore product.

Salisbury added, “the additional Robe Valley deposits will enable us to continue to provide a highly valued product to our long-term customers across Asia.

“The approval of these two projects highlights the strong pipeline of development options within our portfolio as we remain focused on our value-over-volume strategy.”

Rio Tinto has committed $US820 million to the projects, an investment which forms part of the company’s replacement capital guidance of around $US2.7 billion from 2018 to 2020.