Mining giant Rio Tinto is looking at a 360 million tonne a year Pilbara iron ore export rate, hinting it will double the size of its Western Turner Syncline hub to 32mtpa.
Established as a branch for its Tom Price operations 30 kilometres away, Rio is growing WTS to create 15mtpa.
But Rio could more than double WTS to offer a cheaper production alternative to developing new mines after it received consent from the Environmental Approval Authority yesterday, The West Australian reported.
However a spokesman for Rio refused to comment on when the second-stage expansion of WTS would happen, saying plans had not yet been given to the company’s investment committee or board.
A corporate presentation issued late last year said the development of the second stage would happen by mid-2015, preceding new mines at Silvergrass and Kodaideri.
Investors are unconvinced of Rio’s need to spend $5 billion to reach its 360mtpa target in the wake of big miners like BHP Billiton axing huge projects and uncertainty in the global economy.
At an industry conference in Barcelona last week, Rio’s CEO Sam Walsh told investors the company had “multiple pathways” to reach their target, including establishing new mines or saving cash and sourcing “incremental tonnes from existing mines at much lower capital intensity”.
Rio’s current infrastructure is designed to reach a 290mtpa run rate. The company’s board will decide by the end of this year if it should go ahead with an increase to 36mtpa.
Rio Tinto took another step toward expanding its Pilbara iron ore assets in April, when it installed a new shiploader at the Cape Lambert port.
Stage one involved finishing a two-sided berth that offers ore for two carriers, expected to be completed by this year.
The second stage involved a wharf extension that will add two more berths to the port.
Rio’s Pilbara project is least expensive in the Pilbara iron ore industry and still generates huge revenue in a period when competitors are struggling.