Rio Tinto to buy three new iron ore carriers

RIO Tinto will purchase three 250,000 deadweight tonne ore carriers to transport iron ore from its mines in the Pilbara in Western Australia (and potentially from Simandou in Guinea) to customers in China and elsewhere.

RIO Tinto will purchase three 250,000 deadweight tonne ore carriers to transport iron ore from its mines in the Pilbara in Western Australia (and potentially from Simandou in Guinea) to customers in China and elsewhere. The Group has also reserved rights on another two vessels of similar size.

The vessels, to be built by Namura Shipyards in Japan and delivered from late 2012, will play a critical role in consolidating Rio Tinto Iron Ore’s leadership position in the global market.

They will help Rio Tinto build upon its natural freight advantage in Asian exports.

The cost of the three vessels will be about US$315 million.

China’s iron ore imports have grown substantially in recent years and are forecast to continue to grow strongly with the potential to more than double post 2010.

To maintain and increase its share of this growth, Rio Tinto Iron Ore is expanding the capacity of its Pilbara iron ore operations to 220 million tonnes by 2009, supported by long term contracts, hybrid contracts and spot sales.

During its investor seminar on 26 November 2007, Rio Tinto said its growth strategy in iron ore and its pricing outlook would allow the Group to build a conceptual pathway to treble production to over 600 million tonnes of iron ore per annum from Australia and Guinea.

Sam Walsh, chief executive of Rio Tinto Iron Ore said, “Competitive freight and freight management are important levers in our growth plans. These very large ore carriers will assist us in continuing to provide our customers with better delivery options well into the future while locking in low, long term freight rates for the benefit of our shareholders.”

David Peever, managing director of Rio Tinto Marine, said, “These fit-for-purpose vessels are designed for maximum loading at Rio Tinto’s iron ore ports. The timely acquisition of these vessels, and the related options, provides us with maximum flexibility in developing our future marine strategy.”

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