Rio pumping extra $3.1bn into Pilbara

20th Oct 2010 07:03

Rio Tinto has earmarked another US$3.1bn (£2bn) for its Pilbara operations, doubling new investment there just days after the company scrapped its iron ore joint venture with BHP Billiton.The mining giant, which is chipping in $2.1bn (£1.3bn) of its own money, says the move will increase annual infrastructure capacity to 283 million tonnes (Mt/a) during 2013.But even more cash will be needed to fund mine and housing expansions if the iron ore project in western Australia is to get up to production of 283 Mt/a Approval of these is expected within the next 12 months. Good job too as Rio has also backed a final feasibility study into increasing Pilbara production capacity to 333 Mt/a.Today's money, most of which will bolster port and rail infrastructure works around Cape Lambert, takes new investment in Pilbara since July to $6bn, of which Rio has contributed $3.9bn. Most of it has been spent on expansion projects.On Monday, Rio and BHP confirmed the $116bn Pilbara iron ore joint venture was dead in the water as competition authorities from around the world said the proposal would not be approved in its current form."The single best creator of value for Rio Tinto shareholders is to move more Rio Tinto tonnes through an expanded Cape Lambert. Today we have committed further funds to doing just that," said Rio chief executive, Iron ore and Australia, Sam Walsh."Our plan is to boost our capacity by more than 50 per cent to 333 Mt/a, with built-in potential to grow still further. This is the largest mining project ever undertaken in Australia and highlights the quality of our growth options."