Rio Tinto green lights $2.6B Koodaideri iron ore mine investment
Rio Tinto, (ASX, LON, NYSE:RIO) the world’s second largest miner, is set to develop its most technologically advanced mine following the full approval of a $2.6 billion investment in the Koodaideri iron ore mine in Western Australia.
The company stated Koodaideri will deliver a new production hub for Rio Tinto’s world-class iron ore business in the Pilbara, incorporating a processing plant and infrastructure including a 166-kilometre rail line connecting the mine to the existing network.
Construction will start next year with first production expected in late 2021. Once complete, the mine will have an annual capacity of 43 million tonnes, underpinning production of the Pilbara Blend, Rio Tinto’s flagship iron ore product.
“Koodaideri is a game-changer for Rio Tinto. It will be the most technologically advanced mine we have ever built and sets a new benchmark for the industry in terms of the adoption of automation and the use of data to enhance safety and productivity,” Rio Tinto chief executive J-S Jacques said in a media release.“This further investment in our iron ore business is also a multi-billion dollar vote of confidence in Western Australia,” Jacques said.”
Phase 1 will help sustain Rio Tinto’s existing production capacity by replacing depletion elsewhere in the system, and the project is expected to increase the higher-value lump component of the Pilbara Blend, subject to market conditions, from the current average of about 35% to approximately 38%.
Since completion of the pre-feasibility study in 2016, additional capital has been included for productivity enhancements to increase capacity to 43 million tonnes from the 40 million tonne base case.