Rio Tinto breaks the piggy: $4.2 billion investment to boost its iron ore business
Giant miner Rio Tinto (LON:RIO) continues to build its reputation as the most bullish of the major mining companies after it announced today it will spend $4.2 billion on top-tier iron ore projects.
Rio, the world’s second-largest exporter of iron ore, will invest $3.7 billion in its Western Australian iron ore operations, the miner’s most profitable business, and $501 million in its Simandou operation in Guinea.
The news of Rio’s spending in the West African asset, which will turn Guinea into the world's third-largest iron ore producer after Australia and Brazil, came only weeks after market rumours were pointing to an Anglo-Chinese consortium ready to grab the Simandou asset.
"Today's announcement is in line with our long-held strategy of investing in and operating long-life, low-cost, tier one assets, and consistent with our view of the economic outlook,” said Rio Tinto chief executive, Tom Albanese.
“We are mindful of short-term uncertainties, and remain fully committed to a balanced approach to investment, while maintaining a single A credit rating and a progressive dividend policy," he added.
Other companies with major ongoing expansions in the Pilbara iron belt are BHP Billiton (LON:BLT) (NYSE:BHP) and Fortescue Metals (ASX:FMG)