Rio Tinto’s new $3.5 billion iron ore mine approved

Western Australia’s environmental authority has approved Rio Tinto’s plan to build a massive new iron ore mine in the Pilbara.

The Koodaideri mine would be located 110 km north-west of Newman and is expected to have a 30 year life span.

According to documents filed by Rio subsidiary Mount Bruce Mining, the mine is expected to produce 35 million tonnes of ore a year, before a ramp up by 2030 which will see that figure increase to 70 million tonnes a year.

The mine would require a new 167 km railway to be built in order to connect the mine to Rio’s Dampier-Tom Price line.

New roads, power sources, water infrastructure and FIFO village facilities would also be need to be constructed.

Up to 2,000 people would be needed to build the mine while 700 workers would be required for the mine's operation.

The estimated price tag for the mine and rail development is $US3.2 billion ($3.5 billion).

The Environment Protection Authority said the project could go ahead subject to 14 conditions including measures to protect local bat and quoll colonies.

It also wants to ensure that the mine does not increase the spread of asbestos in the environment.

The proposal is open to a two-week public appeals period before being sent to WA’s Minister for Environment Albert Jacob for final approval.

The EPA’s approval comes one the same day as the price for iron ore hit its lowest point in five years.

Dropping 4 per cent overnight, the commodity is trading at $US72.10 a tonne.

However, with a production cost of just over $US20 a tonne, Rio is shielded from price drops, and plans to expand its exports out of the Pilbara from the current 270 million tonnes a year to 360 million tonnes a year.

A final investment decision for Koodaideri is not expected until at least 2016, as the company focuses on upping production through less expensive brownfield expansions.

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